A mortgage broker works as an independent agent who brokers mortgage loans for companies or individuals. This is not a traditional form of business since a broker normally works with loan officers from banks and other lending institutions. As such, there are many brokers who have set up their own firms in order to offer their services to individuals who are looking for mortgage loans. The main advantage of working as a mortgage broker is that one can work independently and it allows you to take the decisions yourself. You may want to check out Wealthy You for more.
There are two main types of mortgage brokers – those who get paid by the mortgage lender directly. Although the mortgage lenders often pay commissions to their mortgage brokers, they do not include the origination fee which is calculated by adding the transaction cost (this includes any title search as well as any appraisal of the property) and the lender’s profit. The origination fee is usually around 2% of the total mortgage amount and this figure could go up or down. Since mortgage lenders do not always require an individual to disclose their identity, the exact amount of commission you will get will depend on the state of your business as well as the mortgage lender in question.
Some people feel that mortgage bankers are actually more expensive than brokers since a mortgage banker will be lending money that you will ultimately repay. However, there are advantages to working with a mortgage banker too. Although the mortgage banker will not be the one to close the deal with the buyer or the seller, he/she will still have the documents in order and will be able to advise you on all the pros and cons. You may also find that you have more options available to you if you work with a mortgage banker rather than a mortgage broker.