“Most homeowners” have experienced dealing with mortgage brokers one way or another. Mostly because they’ve found the house that they want and would want some assistance in paying for it. Regardless of the reason, going to a mortgage broker is still the best way to go as you can get better loan deals as compared to you going from one financial entity to another,” recommends Aldo from Crown Money Management. But how do you make money as a Mortgage Broker?
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What is a Mortgage Broker?
So what is exactly is a Mortgage Broker? And how can you make money as Mortgage Broker? Basically, a mortgage broker acts like the go-between or the middleman between you, the real estate buyer, and the banks or whatever financial institution is capable of lending you money to purchase the property that you want.
Mortgage brokers, like other finance professionals, are regulated and licensed by the governing body that handles the real estate and banking business. Brokers often work with trusted institutions that they have worked with in the past which can positively impact the deal that they will negotiate for you.
They are a few easy ways you can make money as a Mortgage Broker and be successful.
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What Does a Mortgage Broker Do?
On the premise that mortgage brokers help you with your real estate financing, it can be surmised that they have the following day-to-day tasks:
- Process Inquiries – mortgage brokers, especially popular ones, receive more than their fair share of calls in a day. These are mostly homeowners that they have helped in the past asking for assistance about their mortgage status and prospective clients who want to know about the best deal that they can get.
- Research Deals and Mortgage Laws- while most established mortgage brokers would already have partners inside banks and other financial institutions, this does not mean that they don’t need to research about getting better deals and updates regarding mortgage regulation.
- Gather Documents – “One of the best things about dealing with a mortgage broker is that would have the necessary forms that you need to fill out, regardless of which financial institution you will be lending from. They’re a one-stop shop!”, recommends Aldo from Crown Money Management.
- Conduct Background Checks – one the most important things that brokers do is to conduct background checks on new and old clients alike. They would call employers to verify if you really are employed and how much you are really earning. Sometimes, they would conduct an ocular inspection and ask for other referrals to justify your credit rating.
- Report Credit Standing – another important task that ensures continued the partnership with banks and financial institutions is reporting any credit fraud incident. Anything and everything will be dug up and reported.
- Process Loans – once background checks and loan forms are properly filled out, mortgage brokers will do the legwork for you and submit them to their preferred financial institution.
How Do You Make money as a Mortgage Broker
Probably the most important question of all, is how to make money as a Mortgage Broker?
Typically, a mortgage broker earns through commissions as a result of being able to close a deal between the bank and the borrower. These often cost about 1% to 3% and are charged to the borrower before they even conduct a background check. This ensures that they are dealing with serious home buyers and not parties who are just fishing for loans.
Benefits of Having a Mortgage Broker
- Saves Time and Effort. Applying for a property loan through a mortgage broker saves you a lot of time and effort doing the same things they do with very little favorable results. Most of the time, they would already have the information that you would need to secure that much needed real estate loan.
- Access Better Loans. Mortgage brokers work directly with financial institutions and they would have access to otherwise unknown deals and working with them gives you the right access. Financial institutions sometimes have a codependent relationship with brokers as these independent contractors can give them clients that they cannot always reach.
- Save Some Money. While there is that upfront commission based fee, most loans that you can get from a mortgage broker would have lower interest fees as compared to the same loan which you applied for yourself. Dealing with known brokers allows the bank to be more generous with their loans, if only by a little.
Drawbacks of Having a Mortgage Broker
Like most things in life, going through a mortgage broker has their own set of disadvantage.
- Limited Options. Sometimes, the deal that a mortgage broker would give is not the best deal there is in the market. Of course, you would need to spend time and money to find that out which defeats the purpose of getting a broker in the first place.
- Conflicts of Interest. Mortgage brokers are independent of the financial institution and they work on commission which would mean that most of the time, they’re helping you for the sake of earning rather than actually helping.
Mortgage brokers are the best way to access financial institutions that can lend you a large amount of money and they do almost all the legwork for you. Be careful with who you deal with though, make sure that they come from great references and have a considerable reputation.
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