A mortgage broker is a professional who devotes time and effort to arranging mortgage loans for his clients.
They are licensed to analyze the financial situation of the applicants, collect documentation and compare the rates available in the market.
A mortgage broker is also able to connect his clients with different lenders. Thus, it will facilitate the purchase of a home.
But how much does a mortgage broker make per loan?
This is the question that many people who have taken an interest in this career ask themselves. Today we will answer it clearly and accurately.
What are the main functions of a mortgage broker?
They can be individuals or agencies. Their goal is to find the best loan options for their clients. A good broker can find the alternative that best suits the borrower’s needs.
These are their main functions:
- He is in charge of finding the best mortgage loans. The intention is to look for an option that meets his clients’ requirements.
- He must also advise people on what may be the best alternative.
- This professional is in charge of managing the necessary documentation to fulfill the mortgage loan.
How much does a mortgage broker earn per loan?
If you are wondering how much money you can make as a mortgage broker, the answer may surprise you: Between 1% and 2% of the total amount of the loan.
The amount will be paid by either the lender or the borrower. But never by both personalities.
The actual amount for such earnings will depend on three fundamental factors: The experience of the professional, the location where they provide services, and the number of businesses they execute.
Therefore, a mortgage loan in New York is not the same as a mortgage loan in Florida. Also, the percentage of a broker with a 10-year career will be much higher than one with just two years of service.
If getting a loan of US$100,000, a broker could receive between US$1,000 or US$2,000.
Annually and according to the number of transactions made, they can earn between US$80,000 and US$100,000 per year. This very encouraging figure has led many people to train in this career.
What to study to be a good mortgage broker?
You don’t need a college degree to have a successful career as a mortgage broker.
But if you are interested in getting into the business and being valued as a good professional, you will need to be trained in certain areas.
Most companies and clients value people with a strong background in mathematics, finance, economics, and real estate marketing.
In addition, you need a degree that allows you to perform tasks as a consultant. Mortgage brokers are required by the Federal Mortgage Licensing Act, which has been in effect since 2008.
The current regulations require you to pass certain courses to perform tasks related to the profession. After obtaining the license, they will be free to work as they please. But they will also be obliged to undergo training every year to provide a higher quality service.
Benefits of hiring a mortgage broker
These are the main advantages of hiring a mortgage broker to apply for a mortgage.
1. Time savings
The mortgage broker ensures significant time savings when taking out a mortgage. These professionals offer a much more expeditious procedure. They know each of the methods, thus avoiding delays.
2. You will get better conditions
A broker will obtain better contractual conditions so that your mortgage fits your needs. This benefit is directly related to the experience of the professional. The gifts received will be seen in the type of mortgage, more beneficial interest rate or better financing.
3. Accompaniment throughout the entire procedure
A mortgage broker can solve problems related to your mortgage in the shortest possible time. If you make the application on your own, you will hardly be able to solve the issues that arise unexpectedly. You will have the best advice during the whole procedure.
4. Free services
It is important to consider that the benefits of brokers are paid. But in some cases, you can find free advice. It happens when the brokers have direct agreements with the banking entities, which assume the totality of the payment of fees.
In this way, you can hire a good broker.
Now that you have decided to hire the services of a mortgage broker to connect you with lenders, you must comply step by step with the following procedure to succeed.
- Make contact with any of the brokers available in the market. The most important thing is to find out about their professional profile. In this way, you will learn about their successes and working methods.
- After making contact and explaining what you want, you must be very attentive to your contract. Read each of the clauses very well, including the fine print.
- Evaluate each of the offers presented to you. If you have any doubts, ask before making a decision.
- Deliver each of the requested documents.
- Choose the mortgage that best suits your needs. But also complete a test with a notary.
- Sign the contract if you agree with the established conditions. The next step is to pay the mortgage broker’s professional fees.
How do you know if a broker is legitimate?
To avoid inconveniences with your transaction, you must be sure that the officer hired to manage your mortgage is legitimate.
But how can you know that the person you will hire is a professional in the field?
Thanks to the National Multi-State Licensing System, you will have access to a useful tool to obtain the information you are looking for.
It’s called Consumer Access, which keeps a detailed record of most of the agencies in the United States.
There you will know if the broker you have hired is licensed. In addition, you will know if this person has been subject to any disciplinary action for failure to perform any of their duties.