How to Find a Mortgage Broker
Finding a Mortgage: Direct Lenders vs. Brokers
When you're buying or refinancing a home, you have two main paths to securing a mortgage:
- Apply directly to a lender: You can shop rates and terms yourself, comparing banks, credit unions, and online lenders.
- Work with a mortgage broker: Brokers help match you with lenders and assist with the application process, often streamlining paperwork and improving your odds of approval.
You can search for brokers online or ask for recommendations from your realtor, family, or friends. Brokers typically charge 1% 2% of the loan amount, paid by either the lender or borrower but not both.
- Mortgage brokers are licensed professionals who connect borrowers with a range of lenders to find the best-fit mortgage.
- Brokers typically earn 1% to 2% of the loan amount, paid by either the lender or the borrower—but never both.
- To find a reputable broker, ask your real estate agent, neighbors, or search online using trusted review platforms or broker directories.
Key Takeaways
What Is a Mortgage Broker?
A mortgage broker is a licensed professional who works with multiple lenders to help clients find the best mortgage option available. Unlike a loan officer, who represents a single bank or lender, brokers offer access to a broader range of products across institutions.
Don’t confuse a broker with a mortgage banker bankers fund and close loans using their own capital, while brokers act as intermediaries, guiding borrowers through the application process and matching them with lenders.
Why Use a Mortgage Broker?
Mortgage brokers maintain relationships with multiple lenders, giving them the flexibility to match you with the best-fit loan whether that means lower rates, better terms, or more lenient credit requirements.
They’re especially helpful if you’ve had credit challenges, need specialized loan products, or simply want someone to handle the paperwork. Brokers can assist with document collection, application prep, and submission, making the process smoother especially for first-time buyers.
How to Find a Good Mortgage Broker
Depending on your location, you may have several mortgage brokers to choose from. Here’s how to narrow the field and find one that fits your needs:
Ask Locally
Start with referrals from your real estate agent, friends, or neighbors who’ve recently worked with a broker. Firsthand experiences can reveal brokers who are responsive, transparent, and effective.
Search Online
If you're new to the area, browse broker directories like FindAMortgageBroker.com or review platforms like Yelp. Keep in mind: listings don’t equal endorsements always vet further.
Check Credentials
Mortgage brokers are regulated under the SAFE Act of 2008, requiring licensing, coursework, testing, and FBI background checks. Use the NMLS Consumer Access tool to verify a broker’s license and check for disciplinary history. You can also consult the Better Business Bureau for ratings and reviews.
Shop Around
Treat broker selection like rate shopping. Interview multiple candidates and ask:
- How many lenders do you work with?
- Have you helped clients with similar needs?
- What do you charge, and who pays?
- What’s your typical process and timeline?
- How much could you save me?
Even after choosing a broker, compare rates independently to ensure you're getting a competitive deal.
What Do Mortgage Brokers Charge?
Mortgage brokers are paid by either the lender or the borrower but never both, per federal law. They must also disclose their fees upfront, so you’ll know what to expect before signing.
Most brokers charge 1% to 2% of the loan amount. On a $300,000 mortgage, that’s typically $3,000 to $6,000. If you’re covering the cost, the fee is usually due at closing, though it may be rolled into the loan in some cases.
Thanks to the Dodd-Frank Act, brokers can’t be compensated based on the interest rate of your loan a safeguard designed to prevent predatory lending practices and ensure brokers act in your best interest.
As of August 17, 2024, new rules from the National Association of Realtors (NAR) part of a class action settlement have changed how real estate commissions work:
Sellers are no longer required to pay both agents. They may choose to compensate the buyer’s agent, but if they do, this cannot be listed in the MLS.
Buyer’s agents must now sign written agreements with their clients before showing homes, clarifying services offered and fees charged.
These changes aim to increase transparency, reduce conflicts of interest, and potentially lower overall transaction costs for buyers and sellers.
Do You Need a Mortgage Broker?
Whether you need a mortgage broker depends on your comfort level with the process. If you’re confident navigating loan types, rate comparisons, and paperwork, you may not need one. But if you’re short on time or want expert guidance, a broker can simplify the journey.
Are Mortgage Brokers Worth It?
Brokers typically charge 1% to 2% of your mortgage amount. If they secure better rates, faster approvals, or specialized loan options, they may save you enough to offset their fee especially for complex or first-time purchases.
Where to File a Complaint About a Mortgage Broker
Mortgage brokers are state-licensed, so complaints should be filed with your state’s regulatory agency. The American Association of Residential Mortgage Regulators offers a directory of member agencies and links to their homepages. You can also verify licensing and disciplinary history using the NMLS Consumer Access tool.
The Bottom Line
If you're in the market for a new mortgage, a mortgage broker could help you save time and money by matching you with lenders that fit your financial profile.
The best way to find a reliable broker is to ask for local recommendations from your real estate agent, friends, or neighbors. You can also search online and use tools like the NMLS Consumer Access database to check for licensing status and any disciplinary history.
