When you decide to purchase a home and need a mortgage, you can work with several types of businesses to get the loan you need. One option is a mortgage broker. Mortgage brokers are not the same as banks and other financial institutions, yet they are a great resource to use if you need a loan. Here are some of the traits of a mortgage broker and ways they help you get a home loan.
They Work as Middlemen
In the mortgage industry, you have lenders and borrowers. Lenders issue loans to people buying homes, and borrowers use the loans to make their purchases. A mortgage broker is neither of these. Instead, a broker works with both parties, trying to match them up. A broker's primary job is to help borrowers get approved for loans. They get paid by the lenders when they perform the matches and close on loans.
A Broker Helps You Prepare for a Loan
If you do not have the best credit or if you have a bankruptcy or repossession in your past, the broker will help you prepare for a loan. He or she will review your credit to see where you stand. From there, the broker may provide you with tips about waiting a certain time before applying. He or she may give you tips to improve your credit. The purpose is to help you prepare for a loan and get one as soon as possible.
Your Broker Analyzes All Your Information
The mortgage broker you choose will perform many of the same steps as a mortgage lender. The purpose is to analyze your information to make sure you qualify for a loan. During this step, the broker will review your debt-to-income (DTI) ratio, for example. Your DTI ratio reveals how much money you can afford to borrow and repay with a mortgage loan.
Your broker will also ask you for proof of income and may require other documents, too. Your broker handles all the preliminary work of getting a loan before finding a lender for you. The broker may need to contact several lenders before finding one that will approve a loan for you.
No matter who you work with for a loan, you cannot get one until the underwriting department evaluates and approves your loan. Once they do this, they will send a letter that states that they approved your file, and you can close on the house. To learn more, call a mortgage broker today.Share