How many times have you thought of not hiring a mortgage broker? You might want to save the origination fee. Many people think that a mortgage broker will add costs to the deal and, therefore, increase the expenses. Adding, some people also think that it’s the mortgage broker’s job to negotiate until he gets to the best deal. Are you one them? Are you confused about hiring one? Are you wondering why mortgage brokers ask so many questions? Keep reading.
First of all, a broker works on a commission basis that is according to the industry norms. Usually, he/she gets a percentage of the loan amount, which is paid by the borrower or the lender, or both of them. This is according to the industry norm, and no broker charges more than that. The job of the mortgage broker is NOT to negotiate until he/she gets you the best deal in the market. Instead, Investopedia defines a mortgage broker as –
“An intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages. A mortgage broker gathers paperwork from a borrower, and passes that paperwork along to a mortgage lender for underwriting and approval. The mortgage funds are then lent in the name of the mortgage lender. A mortgage broker collects an origination fee and/or a yield spread premium from the lender as compensation for its services.”
A mortgage broker, as per the definition, is an intermediary to hand over your paperwork to the lender. For this reason, you might find your broker asking you many-many questions.
Further, while a set of questions is asked in order to know your financial condition, some of them will be completely off the financial aspect.
A mortgage broker makes sure there is no fraudulent. In case they submit inaccurate documentation, they have to face claims against them. This makes it more necessary to question and then requestion until things are confirmed. Here are some questions you will be asked-
* You’ll be asked to provide a proof of identification and details about your income.
* You’ll have to provide the mortgage broker with details of your spending habits.
* How much amount can you afford to borrow as per your financial condition?
* Are you involved in any lawsuit?
* Have you ever been bankrupt?
* Where you used to live five years ago? (completely off the financial aspect)
USA mortgage brokers may often come back and ask you for more information. No matter how overwhelming or bothersome, you may find it, consider it as an extensive questioning for good reasons. For anything you need, pertaining to loans in USA, the finance brokers are ready to help.