Find a mortgage broker that is right for you by getting recommendations and comparing their experience and fees.
Updated May 9, 2024 · 1 min read Written by Linda Bell Linda Bell
Writer | Bloomberg, Fox Business
Linda Bell is a former NerdWallet writer and spokesperson. She previously was a business news/personal finance reporter, writer and producer at Bloomberg News and Fox Business. Her work has earned recognition from the National Association of Real Estate Editors and the New York Association of Black Journalists.
Reviewed by Michelle Blackford Michelle Blackford
Michelle Blackford spent 30 years working in the mortgage and banking industries, starting her career as a part-time bank teller and working her way up to becoming a mortgage loan processor and underwriter. She has worked with conventional and government-backed mortgages. Michelle currently works in quality assurance for Innovation Refunds, a company that provides tax assistance to small businesses.
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Co-written by Phil Metzger Content Management Specialist Phil Metzger
Content Management Specialist | Homebuying, home ownership, investment properties
Phil Metzger is a former NerdWallet content management specialist focusing on mortgages, homebuying and homeownership. He has been a journalist for many years. His work has appeared in print and online in major newspapers and magazines and on television and radio. As a homeowner and investor in income property, Phil has a keen interest in housing inequality and affordability.
Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page. Our opinions are our own. Here is a list of our partners.
Editor's Note: This article has been updated to reflect the outcome of a legal settlement involving commissions paid to real estate agents representing home buyers. Starting in August 2024, home buyers in most markets must sign agreements with their agents before touring homes, and buyers will set their agents' commissions through negotiation. See how this will affect home sellers and home buyers .
When financing a home purchase, a mortgage broker is like a matchmaker in a relationship: It can help you find a lender with the best mortgage for your needs, secure a competitive interest rate and save you time and money.
But just like a good matchmaker can make a big difference in finding the right partner, you’ll want to choose the right person to partner with when financing a home. While a mortgage broker isn’t essential to the homebuying process, you may find their guidance helpful. Follow these steps to find the right mortgage broker for you.
As with any important financial decision, thorough research is the first step to choosing wisely. Here's how to get started:
Reach out to friends and family. Ask your family and friends if they have used a mortgage broker. Were they satisfied with the service they received? Was the broker knowledgeable and attentive?
Get referrals from your real estate agent. Your real estate agent should have a pulse on mortgage brokers in your area and be able to recommend qualified individuals. Real estate agents make a commission after a home is sold, so they have a vested interest in recommending a good broker.
Read online reviews. Read reviews on Google or Yelp to get a better understanding of the kind of experience you could expect from your candidates. For example, how long did it take for the customer's loan to be approved? If there were any stumbling blocks in the transaction, how did the mortgage broker deal with them? You should also pay attention to what reviewers say about the mortgage broker's communication, organization and problem-solving.
You can verify a mortgage broker's license by checking your state regulator or the Nationwide Mortgage Licensing System & Registry. The Better Business Bureau can also indicate if there have been complaints about the broker and whether those issues were resolved.
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Just as NerdWallet recommends shopping around when comparing mortgage lenders , you should do the same when choosing a mortgage broker. After doing your research, narrow your list to at least three candidates. Then, ask them these questions:
What types of products do you offer? One benefit of working with a mortgage broker is that they partner with many lenders and provide borrowers with various mortgage options. But just as with a lender, a mortgage broker may not have access to every loan type. So if you are interested in a specific one, make sure the broker offers that option.
Which lenders do you work with? A mortgage broker may work with a set of preferred lenders, potentially limiting the savings you could expect from shopping around. Some lenders don’t work with brokers at all, meaning it may be in your interest to do some lender research on your own. If you want a connection to a specific lender, make sure your broker can offer it or point you in a similar direction.
What are your fees? Mortgage brokers are required to disclose their fees . Typically, they are paid 1% to 2% or more of the loan amount. By law, the maximum fee mortgage brokers can charge is 3% of the loan amount. Mortgage brokers can be paid by either lenders or borrowers, but they can't be paid by both parties. If the borrower pays the fee, it can be paid upfront or rolled into the loan amount. You can avoid mortgage broker fees if you choose not to work with a broker and instead find a lender yourself.
Have you worked with borrowers in my situation? Find out if the mortgage broker has experience with borrowers who match your specific needs, such as having bad credit or wanting a particular type of loan. Of course, there's no guarantee the mortgage broker will get you the best deal, but if they're familiar with your situation, they might suggest money-saving options you haven’t considered.
If you have a problematic credit history and know that you’ll want to focus on lenders with flexible requirements, you can start with NerdWallet’s list of the best mortgage lenders for low or bad credit score borrowers .
A mortgage broker can make getting a home loan easier by connecting you with a lender. But you can also make the entire process smoother by ensuring you are financially prepared before selecting your mortgage broker.
To get started, pull your credit report . You can access yours from all three credit reporting bureaus — Experian, Equifax and TransUnion — at AnnualCreditReport.com for free every year.
It also helps to familiarize yourself with some common types of loans to get an idea of what may be a good fit. Do you have limited savings for a down payment? Maybe a loan insured by the Federal Housing Administration — called an FHA loan — is right for you. Do you prefer an aggressive strategy for paying down debt? You may want to consider a 15-year loan. The more you know about what you want and what you can realistically afford, the more productive your conversations with the mortgage broker can be.
A home affordability calculator that considers your income, debts, and how much money you have for a down payment can help you set a realistic budget.
You can also begin compiling documentation the broker may need. These documents may include personal information such as your Social Security number, state-issued ID and financial information including recent bank statements, tax returns and W-2 forms.
Choosing the right lender can ensure that you get the best available deal on your mortgage. A knowledgeable and experienced broker who understands your needs can present a range of options for you to compare, making the mortgage application process much smoother and potentially saving you thousands of dollars over the life of the loan.
Frequently asked questions Is paying a mortgage broker worth the money?A mortgage broker is an expert who can suggest loan options based on your financial situation. It can also save time as the legwork is done for you, though you may lose some control over the lender shopping process. You’ll have to decide for yourself whether it’s worth the money to save time and view more loan options than you might find on your own.
Do mortgage brokers charge a fee?Mortgage brokers do not work for free; they get paid by either the borrower or the lender. Fees generally are in the range of 1% to 2% of the loan amount.
Is it better to use a mortgage broker or do it yourself?Depending on your level of expertise in dealing with lenders, a mortgage broker can help find a loan that fits your situation at a rate you can afford. Working with lenders takes time, and a broker can also help cut through the jargon so you understand what you’re getting.
Is paying a mortgage broker worth the money?A mortgage broker is an expert who can suggest loan options based on your financial situation. It can also save time as the legwork is done for you, though you may lose some control over the lender shopping process. You’ll have to decide for yourself whether it’s worth the money to save time and view more loan options than you might find on your own.
Do mortgage brokers charge a fee?Mortgage brokers do not work for free; they get paid by either the borrower or the lender. Fees generally are in the range of 1% to 2% of the loan amount.
Is it better to use a mortgage broker or do it yourself?Depending on your level of expertise in dealing with lenders, a mortgage broker can help find a loan that fits your situation at a rate you can afford. Working with lenders takes time, and a broker can also help cut through the jargon so you understand what you’re getting.
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Linda Bell is a former NerdWallet writer and spokesperson. She previously was a business news/personal finance reporter, writer and producer at Bloomberg News and Fox Business. Her work has earned recognition from the National Association of Real Estate Editors and the New York Association of Black Journalists. She earned a bachelor’s degree in journalism and English literature at New York University. See full bio.
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Phil Metzger is a former NerdWallet content management specialist covering mortgages, homebuying and homeownership. See full bio.
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