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What does a mortgage broker do?
Mortgage brokers match borrowers with lenders. They work as a loan marketplace with all the requisite information on financial institutions as well as the loan products they offer to the customers. They work as “free agents” for multiple banks and earn a fee or commission when they sell a loan to a bank. Just![](http://www.mudrahome.com/wp-content/uploads/2017/02/mortgage-broker-300x225.png)
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The advantages of using a Mortgage Broker
One of the best advantages to using a broker is the choice of banks and NBFC they offer. This saves a lot of time of the borrower to do the research and shopping for the loan they are looking at. Mortgage Agents have an access and understanding of the credit policies of 20-30 Banks & NBFC, so they can find a suitable loan for a client without the client having to meet with multiple banks and try and become a loan expert them self. More importantly, brokers are not aligned to one particular bank and work equally as an agent for the client as well rather than the agents for bank itself. Additionally, a good broker is well experienced in finding the best deals. They know the challenges of the banking industry, and should be able to direct you to lenders which are best suited for your profile and the type of loan you are looking at. When it comes to seeking a loan from a financial institutions, the broker can also advocate on your behalf and can negotiates on the best possible loan deals for you, they also increasing your chances of success in getting the loan sanctioned. Many clients have the misconception that they will pay more if they take a loan through a broker, or that a broker will try to sell them on a higher interest rate in order to make a bigger commission. But in this is not the case. "The truth is that you won’t pay more through a broker and in fact can often pay less. A broker isn’t paid more if the rate charged to the customer is higher, so it is in the broker’s interest to get the best deal possible for the client because the broker will only get his fee once the deal is materialised between the lender and the borrower.”The disadvantages of using a Broker
Despite the many benefits associated with using a broker, there could also be some disadvantages. Due to the large number of brokers out there in the market & no regulations on mortgage brokers, it can be difficult to discover which brokers are highly experienced, and which brokers are new. Which broker have the in-depth financial market understanding, who can further understand the customers financial needs and can get the work done with best deals in minimum possible time or who is just working as a document collection resource for the banks without any financial knowledge about the lenders and their products. The most common way to identify good mortgage brokers is by way of reference from someone who may have used that broker previously. It is also important to do a bit of basic research like to check how long the brokers business has been established, what is the qualification of the broker, how much lending experience does the broker has. Do they have a office? Etc. Clients should get some confidence that they are dealing with a broker who is established and won’t be here today and gone tomorrow.Conclusion
If you don't have a solid understanding of the finance and mortgage industry, it can also be difficult to judge what is a good deal; using a mortgage broker can be very helpful. Shop, shop, shop. Before signing on the dotted lines of the loan agreements, investigate at least two- three mortgage options. Try to compare apples-to-apples. Ideally you should be able to compare bank loans that are for the same term and the same amount with the same down payment. Then, get a detailed breakdown of rates, tenors, fees and total closing costs. A mortgage broker can help you compare all the terms at the convenience of your home or office, saving a lot of hassle, time, effort and energy which eventually saves the Money.