How a Mortgage Broker finds you better pricing
A bank can offer you only its own menu of loans. A Mortgage Broker compares many wholesale lenders for the same loan, then shows you the difference in dollars.
The same loan, priced differently
Lenders price loans differently every day. Their costs, their appetite for certain loans and their own rules all vary. Two lenders can quote noticeably different terms for the same borrower and the same home.
As a Mortgage Broker, we send your file to the wholesale lenders that fit it and compare what comes back: rate, points, fees and the rules each lender adds. You get the comparison from one application.
What the data shows
Polygon Research’s analysis of 2023 federal mortgage data (HMDA) found that borrowers who used an independent Mortgage Broker saved an average of $10,662 over the life of the loan compared with nonbank retail lenders, and $13,432 on VA loans, mostly through lower upfront costs. The study was supported by United Wholesale Mortgage. Read the study summary.
Fewer roadblocks
Many lenders add overlays, extra rules on top of the agency guidelines, such as a higher minimum credit score or limits on acreage and manufactured homes. When one lender's rule stands in the way, we take your file to a lender without it. That matters in Southwest Colorado, where rural properties and self-employed income are common.
Nearly every residential loan
Through many wholesale lenders, a Mortgage Broker reaches nearly every residential loan: conventional, FHA, VA and USDA, jumbo, renovation, construction, HELOCs, bank statement and DSCR. The one thing a broker does not offer is a bank's in-house loans, which it keeps for its own customers.
How broker pay works
Federal rules say a loan originator cannot be paid based on your rate or loan terms, and cannot be paid by both you and the lender on the same loan. The amount shows on your Loan Estimate, so you can compare it with any other offer. You can read more in our article Who does your loan officer really work for?
How a lower rate shows up in your Mortgage Plan
Every client receives a Mortgage Plan. Each option is its own card with its monthly payment and cash to close. When one option has a lower rate, you see the difference in its payment, and in what it costs over 3, 5, 7 and 10 years. When the lower rate comes with points, your Mortgage Plan shows the month the points pay for themselves.
To run the same comparison on two quotes yourself, use the points break-even calculator or the lesson on comparing two Loan Estimates.
Common questions
Do Mortgage Brokers cost less?
Yes, on average. Polygon Research’s analysis of 2023 federal mortgage data (HMDA) found that borrowers who used an independent Mortgage Broker saved an average of $10,662 over the life of the loan compared with nonbank retail lenders, and $13,432 on VA loans, mostly through lower upfront costs. The study was supported by United Wholesale Mortgage. A broker is paid either by the lender or by you, never both, and the amount is shown on your Loan Estimate. Read the study summary.
What is a lender overlay?
An overlay is an extra rule a lender adds on top of Fannie Mae, Freddie Mac, FHA, VA or USDA guidelines, such as a higher minimum credit score. Overlays differ from lender to lender, so a loan one lender turns down can be approved by another.
Can a broker get every loan?
Nearly every residential loan. Through many wholesale lenders, a Mortgage Broker reaches agency and government loans (conventional, FHA, VA and USDA), jumbo, renovation, construction, HELOCs, bank statement and DSCR loans. The one thing a broker does not offer is a bank’s in-house loans, which it keeps for its own customers.