Khan Home Loans LLC

Mortgage broker in california

What Are Mortgage Brokers And How Can They Help?

When you buy a new home, a significant decision you have to make is finding the perfect mortgage loan. Such a major decision should be left to an expert. That expert is a mortgage broker. With his help, you can get the most suitable types of home loan in California with the best interest rate.

A mortgage broker is a professional who makes your home buying process easy. From application to the closing of a loan, a mortgage broker will help you through everything.

What Is A Mortgage Broker?


A Mortgage Broker is like a middle link between lender and borrower. According to the borrower’s needs and suitability, the mortgage broker will find the perfect type of mortgage loan with a loan interest rate.

Mortgage brokers deal with a variety of mortgage lenders. So he can compare various lenders based on your needs. Moreover, Mortgage brokers are reliable as they are licensed professionals.

You can easily find a mortgage broker in California. They assist and guide you through the loan process. Collecting important documents, verifying your income and credit history, and accumulating other required information are the tasks done by a mortgage broker.

All these things help to apply for a loan and to negotiate loan terms.
While working with a mortgage broker, you can save time and some bucks from your pocket as they would get you the best deal possible.

Even if you have a complicated or not-so-great credit or income history, a mortgage broker can help you to get a mortgage loan.

What Does A Mortgage Broker Do?


Mortgage brokers are well connected with different banks and mortgage lenders. This means they can provide a lot of mortgage loan options to their customers.

Like if you’re thinking of buying a new home or refinancing your home but you don’t agree with the existing rate offered by your mortgage lender, you can always call a mortgage broker to solve all your worries.

Being a professional with knowledge and experience, a mortgage broker will provide you with different options of mortgage lenders or refinance lenders in California.

It is not necessary that a borrower will possess all the knowledge about mortgages to achieve the best deal. There are many borrowers who have little to no idea about the mortgage lending process or how to get a mortgage loan. This is where the role of a mortgage broker starts.

Sometimes even after getting a mortgage loan borrowers to feel skeptical if they got the best deal. By hiring a mortgage broker, you will be satisfied as you will get the best mortgage options available according to your needs.

After researching and providing the lender options, now it is the borrower’s turn to choose which lender’s terms are the most suitable. The mortgage broker will come into action and will communicate with the bank, closing agent, and real estate agent.

The mortgage broker will collect and organize all the necessary documents required in the process. Other than that, a mortgage broker will keep you away from lenders who put troublesome terms buried in the loan contract which otherwise you wouldn’t be able to identify.

How To Choose The Right Mortgage Broker?


When you take a loan, you share a lot of your personal financial details with the broker. So you need to make sure you choose someone who is experienced and makes you understand everything related to the loan process.

To get a mortgage broker who can guide you through everything, follow the steps below:

1. Ask For Suggestions:


The simplest way to find a mortgage broker is to ask your friends, family, and colleagues to suggest someone. But be clear that they should only suggest someone who is experienced and trustworthy and they have actually used that broker. In case that doesn’t work out, you can ask your real estate agent to suggest you a mortgage broker as they have contacts.

2. Research:

After compiling some options, start to research the mortgage brokers. You can visit their website to know everything about the broker. It is essential to properly research before you choose one. Also, check with your official state’s licensing authority about their license.

3. Asking Important Questions:

Before you make a decision, make sure your broker meets certain criteria. Nowadays, people usually don’t prefer to go to a mortgage broker and approach the lender themselves. This is done to avoid any cost to middlemen. But a mortgage broker can come up with a lot of options and make your work a lot easier. So it can be worth the cost.

Before choosing a mortgage broker, ask him certain questions:

-Do I qualify for a mortgage?

When you apply for a loan, make sure to share your financial history in depth with the mortgage broker so he can determine if you qualify for certain mortgage options.

The requirements are different for different types of mortgages. The requirements for FHA mortgages in California are different from other types of loans.
Your credit score, income history, current income, previous bankruptcy or any employment problems, etc should be shared with your broker. Then he/she will identify if you qualify for the desired mortgage loan.

What are the lender options?

A section of lenders does not work with brokers as they have their own loan officers. A major question to ask your broker is how wide the pool of options is. The more the lender options are, the more the chance of finding the perfect lender.

How much would be your fees and who would pay- lender or borrower?

The fees or charges differ from one broker to another. Sometimes a broker charges a commission based on the loan amount from the lender. In some cases, the borrower has to pay some fees also based on the loan amount.

Usually, the payment is made after the closing of the loan. Make sure you clearly ask about the payment whether it is to be made by the lender or the borrower.

How Does A Mortgage Broker Get Paid?

Typically, a mortgage broker charges a commission ranging between 0.50% to 2.75%. A mortgage broker cannot charge commission as he desires. The  Federal Law has imposed a limit on the commission charged by a broker that is 3% of the principal amount. Additionally, the broker cannot be paid by both the lender and the borrower and the commission can’t be based on the interest rate.

The amount that the mortgage broker will charge depends on the type of mortgage and the term of the loan. A mortgage broker can charge origination fees or a combination of different types of fees or simply brokerage.

The borrower benefits greatly when the commission is paid by the lender. Even If the broker charges some fees from the borrower, it is worth it as the services that he/she provides are top notch and he/she brings expertise to the table.

What Is The Need Of A Mortgage Broker?


Using a mortgage broker can turn out to be a wise option. He/she can bring you the best deal for your mortgage loan. You can get your desired home with a minimal interest rate.

A borrower can benefit a lot by using a mortgage broker, especially those borrowers who want to purchase a particular property type or people having weak financial backgrounds.

Mortgage brokers bring expertise and save you from the long, time taking, and tiring process by doing all the work required. It can be great for first-time home buyers to use a mortgage broker as they aren’t familiar with mortgage types and the process involved.

As a certified professional, a mortgage broker will make sure there is no chance of any error while applying for a loan. For people who have experienced bankruptcy or whose credit score isn’t up to the mark, using a mortgage broker can get them access to mortgage options that they wouldn’t have got individually.

As mentioned above, the payment that a mortgage broker charges is highly regulated which makes it easier and more convenient to use one. Many technical terms are used in a loan agreement and during the application process which isn’t understood by an individual. A mortgage broker will help the borrower in understanding such terms.

They also help to speed up the loan process. As they are experienced, they have built working relationships with lenders and lending institutions. This makes the loan process fast, convenient, and easy in turn benefiting the borrower

Final Thoughts:

A mortgage broker can be termed a middleman. All the official communication and the whole process of mortgage are managed by the mortgage broker. Using a mortgage broker, especially for first time homeowners is a great decision. You are saved from running around completing the long and tiring loan process.
Leaving such a big decision to an expert is a smart choice. A borrower can definitely benefit from it as he doesn’t have to pay anything from his own pocket. The biggest advantage of using a mortgage broker is you get access to a wide range of lenders. 
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