What is a Mortgage Broker?

In order to afford their homes, people often borrow money from the bank. In order to become approved for a mortgage a person will often hire a mortgage broker to act as an intermediary between him and the bank. Once a mortgage broker agrees to work for a borrower, he gathers information on the person's income, assets, and employment so that he can assess the borrower's ability to obtain financing. After learning the details, the mortgage broker will determine what would be an appropriate loan amount, loan-to value, and loan type for the client. The client is free to make such assessments himself, but it is often easier for the mortgage broker, who does this for a living, to determine.

After dealing with the paperwork, a mortgage broker finds the lowest mortgage rates available out of all the rates offered at various banks. Not every mortgage broker will have access to every bank's rates, so it makes sense to hire a reputable mortgage broker who is more likely to have access to better rates and ask him for quotes from as many lenders as possible. Also pay attention to what the mortgage broker charges, because some charge higher rates than others. They earn their money by charging closing costs upfront.