You might wonder how mortgage brokers get money. There are those who will give you advice and link you with specific banks or lending firms without asking for anything from you. There are others who will ask for an initial service fee, but the amount is really low compared with the kind of services rendered.
The answer to this question is that there are other ways in which mortgage brokers get income. As long as they can successfully match a client with a bank or lending firm, they will get a lot in return.
Types of brokers
The first type is called the wholesale mortgage broker. This person is tied to a company. He is like an employee of a bank or firm, so in partnering with him he will see to it that you choose the company he is affiliated with. Once he has closed the deal, he can get commission from the said company on top of the salary that he gets. The problem with this type of broker though is that you will not have a lot of options. He will have biased judgement in favour of the company he is affiliated with. You will also not understand a lot of things about the mortgage since your broker is not independent.
The second type is the independent broker. These are people who are not affiliated with any company. They can give you bias-free advice. They know the ins and outs of the industry as they have linked their clients with various firms or banks in the past. This is good since you don’t have to limit your options. They usually get commission only when they have successfully linked a client with a firm. The amount is also not guaranteed, unlike wholesale mortgage brokers.
It’s your choice
Ultimately, it is your choice who to trust between these two types of brokers. Not all of them are the same. They have their own strategies to partner you with the right bank or firm. The best choice though is someone who will give you an honest opinion about potential lenders. You want to make the right choice in the end.
You can check out mortgage brokers Essex if you want excellent brokers in the area. They will walk you through the entire process and give you the right answers to your questions. Before you know it, you will have found the perfect mortgage, and will be living in your dream house, and gradually repaying the amount that you borrowed. The process is not easy, so you have to carefully go through the options and seal the deal with the most suitable broker.