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Mortgage brokers represent you, the borrower, to obtain financing from a variety of lending sources. If mortgage brokers are middle men between you and the lender how can they save you money? Don't you have to pay extra for using a mortgage broker? Independent surveys have shown that mortgage brokers do not cost you more than direct lenders. In many cases they even save you money. Mortgage brokers increase competition in the market place, resulting in lower rates for everyone. Since mortgage brokers obtain their funds from a variety of sources, they allow you access to a large number of lenders. When you apply for a loan with a mortgage broker, you are effectively applying for loans with all the lenders that mortgage broker is approved with. Mortgage brokers obtain rates at wholesale, markup these rates by adding points and then quote you a retail rate. Mortgage brokers are not employees of the lender, rather they are independent contractors. Mortgage brokers are free to set their own pricing. Therefore two different mortgage brokers using the same lender can quote you different rates/points! This is because the two brokers may markup wholesale rates differently. Back to Frequently Asked Questions
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