No, You Won't Be Charged Extra for Using a Mortgage Broker - Here's How They Get Paid
Are There Hidden Fee’s When Using A Mortgage Broker?
When it comes to buying a home, the process can be overwhelming, and you might be tempted to do everything yourself to save on costs. However, one area where it's helpful to have professional assistance is in securing a mortgage. But how do mortgage brokers get paid for their services? And will you be charged extra fees for using them? In this post, we'll go over all the details to clear up any confusion and help you make an informed decision when it comes to choosing a mortgage broker.
As we mentioned in the introduction, mortgage brokers typically get paid by commission. This means that the lender providing the mortgage pays the broker a finder's fee for referring and managing the application and mortgage closing. The amount of commission varies depending on the lender and the specific mortgage product being offered. However, it's important to note that this commission isn't added to the cost of your mortgage, so you won't be charged extra for using a mortgage broker.
It's worth noting that there may be fees from the mortgage broker if the mortgage is funded by a private lender. In these cases, the fees will be clearly outlined to you and disclosed in disclosure statements by the lawyers. However, many mortgage brokers work with traditional lenders like banks, which means you will not be charged extra costs for using their services.
But how can you be sure your mortgage broker is acting in your best interests and not just looking to earn a commission? Good mortgage brokers are licensed professionals who are required to act in the best interests of their clients. They should thoroughly assess your financial situation and provide you with multiple options for mortgage products, including rates and terms. Ultimately, the decision of which mortgage product to choose should be up to you, and a good mortgage broker will work with you to ensure that you're making an informed decision.
Another benefit of using a mortgage broker is that they are often able to secure better rates and terms for their clients than those available directly from lenders. This is because mortgage brokers have access to a network of lenders and mortgage products that they can shop around for the best deal. In addition, mortgage brokers often have longstanding relationships with lenders, which means that they may be able to secure special rates and terms that are not available to the general public.
In summary, mortgage brokers typically get paid by commission from the lender providing the mortgage, and you will not be charged extra fees for using their services. Good mortgage brokers are licensed professionals who act in the best interests of their clients, providing multiple options for mortgage products and working with them to ensure they make informed decisions. Using a mortgage broker can result in better rates and terms than those available directly from lenders, thanks to their access to a wide network of lenders and longstanding relationships in the industry. So, if you're in the market for a new home, consider working with a mortgage broker to help you secure the best mortgage deal possible.