In return for doing business with the mortgage lender on your behalf, mortgage brokers often expect a percentage of the mortgage as their fee. In such a case, if your mortgage amount equals $250,000, and the broker expected a fee of 1%, his pay would equal $2,500. This may sound like a large amount, but considering any possible deals that may come to you through your broker in addition to the reduction in stress, it is well worth the cost.
The job of a broker is to be a buffer between you, the borrower, and the mortgage lender. The broker is supposed to handle the mortgage process and deal with the lender in such a way to help you receive the best loan possible, causing you the least amount of stress possible. Mortgage lenders are often large companies with complex business and no time to set up a system of attracting customers. Instead of drawing in their own clientele, lenders do much of their business through brokers. In return for the customers brought in, lenders often offer brokers lower, wholesale rates, which are passed on to you. This process works well for all parties involved. The mortgage broker is paid to do business with the lenders, the lenders offer brokers better deals that can be found on the market, and ideally you find yourself with a great mortgage that, even including broker fees, is better than one you would have found otherwise.
A large benefit of having a mortgage broker involves his experience with mortgage lenders. In any business there will be some factions that work more efficiently than others. Mortgage brokers will be able to choose the lenders that they know through their experience will work most swiftly, where as someone with less experience could find themselves entangled in the origination process for weeks.
Mortgage brokers can work with mortgage lenders on the behalf of customers with bad credit who find it difficult to obtain fair loans on their own. Experience and professionalism will allow a broker to guide prospective borrowers with less than perfect credit history or smaller incomes through the mortgage process, turning a high stress situation into a simple business transaction.