The mortgage application process is one of the most challenging aspects of the home buying process, particularly for someone with no prior experience. This is where mortgage brokers enter the picture.
What are the roles and responsibilities of a Springfield mortgage broker?
A mortgage broker in Springfield, Illinois wears many hats. Some of their key roles and responsibilities include the following:
- They serve as a go-between for the lender and the borrower and handle the time-consuming process of securing the mortgage.
- They gather all of the necessary paperwork, such as bank statements, credit reports, and employment history, for borrowers buying or refinancing a home in Springfield, Illinois.
- They are capable of anticipating problems that may arise during the mortgage application process.
- They can assess which issues can cause significant problems with one lender versus another.
Why do some homebuyers avoid mortgage brokers?
Homebuyers in Springfield, Illinois often feel more at ease heading straight to a major bank to secure their mortgage. In that case, buyers should at the very least consult with a licensed mortgage broker to fully understand all of their options regarding the types of mortgage programs and available interest rates. Furthermore, experienced mortgage brokers are versatile and can collaborate with attorneys, underwriters, title agencies, and even the sellers’ real estate agent to streamline the mortgage application process.
Homebuyers may also avoid mortgage brokers in some cases because they think they can shoulder the cost of engaging a broker themselves. However, a mortgage broker’s fee (also known as a loan origination fee) is relatively minimal and is paid by the lender at the time of closing. This fee is usually 1-2% of the total loan amount and can be rolled into the mortgage or charged separately. Brokers may even waive the loan origination fee as an incentive for buyers to use their services.
Diligence pays off
When hiring any professional, it is essential to exercise caution. Hiring a mortgage broker in Springfield is no exception. Some brokers are purely motivated by the need to close as many loans as possible and as quickly as possible, even if sealing each deal means compromising quality and/or ethics. Furthermore, a mortgage broker would not have the same degree of control over your mortgage as a major bank that underwrites the mortgage in-house.
Here are a few ways homebuyers can capitalize on the benefits of a licensed mortgage broker while also protecting themselves…
- They should ask for referrals from friends, family, and co-workers and check the brokers’ reference (if available).
- They should ensure that the broker has passed both the state and national exams.
- They should inquire with the mortgage broker about the types of lenders they work with. Brokers can signal to borrowers if they are a good match by simply stating that they work with AAA-rated lenders, local credit unions, or secondary market lenders such as the Federal National Mortgage Association (FNMA), commonly known as Fannie Mae and the Government National Mortgage Association (GNMA), or Ginnie Mae.
- They should inquire as to whether the broker is covered by professional liability insurance.
Are you looking for a mortgage broker in Springfield, Illinois?
The mortgage brokerage industry’s reputation suffered as a result of the housing crisis, but with increased regulation and oversight, it has returned to form. According to the CSBS 2020 MLO REPORT, there are nearly 688,327 federally licensed mortgage loan originators ready and willing to assist those making the most significant purchase of their lives.
If you are looking for a reputable and licensed mortgage broker in Springfield, Illinois, you can count on Compass Mortgage. Call us at (833) 638-7836 or contact us online to learn more about how we can help you make wise and informed choices regarding your mortgage financing.