Home Loan Brokers

Tired of dealing with paperwork every time you apply for a loan? You may want to hire a broker next time. Brokers take all the hard work out of securing a loan, leaving you free to focus on the important stuff (like choosing a loan type). They may cost you a bit more, but you'll find that it's all worth the stress and effort you save.

Home Loan Brokers offers a full range of information on brokers, lenders, and the loans and credit industry. We make it easy for common borrowers to understand the process, from choosing a home to closing and finalizing your home loan. Learn more about brokers and get the information you need from our extensive article database.

So what is a broker, and do you really need one?

Home loan brokers and lenders aren't the same thing, although they do work closely together. The loan actually happens between you and your lender; the broker only serves as the intermediary between you two. So technically, brokers aren't really necessary. People choose to hire brokers because they take care of all the real work, including the documentation and application process. They also offer advice on choosing homes and loan structures and may even bargain with lenders to get you better rates. For first-time home buyers, brokers are a great help in going through their first loans.

What types of brokers are there?

Once you've decided you need a broker, you'll need to decide whether to go to a firm (brokerage) or get an independent broker. Each one has its own advantages. Independent home loan brokers, although they charge more, can give you a wider range of options since they're not tied to any lenders or networks. If you want to save on fees, you can go to a brokerage, but your choices will be limited because they'll only refer lenders to whom they are linked.

How does a broker work?

During your first meeting, a broker will ask you to discuss your financial status, loan preferences, and other specific demands. They will use this information to draw up a list of lenders that match your profile. They'll also scout for homes that fit your budget and requirements. Once you've chosen a home, they'll go over your lender options with you and help you choose which one offers the best deal. When you've both agreed on a home and lender, your broker will start preparing and filing your application.

How do you choose a broker?

There are lots of home loan brokers in the market, but not all of them are reliable. One thing most first-timers fall for are upfront fees, which are the surest sign of a broker's incompetence. Good brokers will outline any fees in a written contract before making you pay a single dollar. Before choosing a broker, look up their history and license and make sure they're authorized to work in your state.