Is a Seattle mortgage broker the best choice for sound financial advice when buying a home? While a broker can connect you with multiple lenders, they may not be the best partner when looking for a home loan.
Online mortgage hunting is easy and fast but can be confusing and overwhelming when you see how many choices there are. Do you need a mortgage broker in Seattle to help you decipher the quotes and loan options, or is a professional with a more dedicated background better? Here’s everything you need to know about Seattle mortgage brokers.
Mortgage brokers aren’t lenders, and typically don’t work directly for a lender; instead, they function as a middleman in the lending process, playing matchmaker to hook borrowers up with lenders willing to offer a mortgage. The lenders can be large banks, online loan sources, or local banks or credit unions.
The qualifications for being a mortgage broker vary slightly from state to state, but in general, a broker will have a bachelor’s degree in finance, accounting or business, and will have completed a pre-licensure course or certification. They may need to hold a business license for the state(s) in which they practice. Seattle mortgage brokers typically have passed the National Mortgage License System (NMLS) Loan Originator exam, and they have to be bonded.
Mortgage brokers don’t make loans. They don’t approve you for a loan, underwrite the loan, set the interest rate for the loan, or fund the loan. Their job is to make the introduction between borrower and lender to “originate” your loan, and from there it can vary.
Every broker may provide a slightly different lineup of services and level of support. In the ideal situation, a Seattle mortgage broker will gather a large amount of information and documentation from you, and talk with you about your specific financing needs. Then they’ll find the right loan option and negotiate with lenders about the interest rate, down payment, and closing costs.
A lot of brokers don’t really do a deep dive, however, and rely on algorithms and a set of tried and true options, working with a few of their favorite lenders. This can result in a loan that isn’t as personalized or right for you as you had hoped.
One of the reasons a mortgage broker may not give you the best advice is because of how many brokers typically get paid. Brokers paid by commission are compensated based on two factors: how large of a loan you get, and how high of a percentage of that number the lender (or you) are willing to pay.
Broker commissions are anywhere between 0.5% and a federal cap of 3% of your total loan amount. This can lead to bias, as the broker may instinctively guide you towards loan options that result in a bigger loan, or towards lenders who offer them a bigger percentage.
There are some protections in place. For example, the Dodd-Frank Act prohibits dual compensation, so a broker can never accept payment from both borrower and lender. If they accept a commission from a lender, they can’t ask you for a loan origination fee. If you pay their commission, they can’t get a finder fee from the lender.
In rare cases, a broker may opt for a flat fee as opposed to a commission. This is something to explore if you do decide to use a Seattle mortgage broker. Remember that if you’re the one picking up the broker tab, you’ll have to come up with cash at closing. In contrast, lenders settle with brokers after the fact.
It’s the digital age and you can do everything online, including applying for a home loan. Do you need a mortgage broker to give you access to online lenders? Take a step back and consider your options. While it can be tempting to try and get a bunch of quotes from different lenders, this approach won’t yield accurate results.
Instead, consider getting fully preapproved by a reputable mortgage bank with an online home loan application process and a secure portal that lets you submit all of the important documents needed for verification without ever leaving your home or worrying about your personal information being sent to dozens of destinations.
Just gather your proof of income, proof of employment, tax records, and other financials including your monthly debt obligations and start the process. At Sammamish, you can do your entire mortgage application online yourself, or ask for help at any time. We have salaried loan officers standing by, ready to offer insights into different home loan programs and help you navigate the process.
Once you get your preapproval letter, you can house hunt with confidence, able to make a serious offer at any time and show sellers and real estate agents you have proper backing. The entire process can be completed without involving a broker (or their fees) at all.
There’s another reason to use a mortgage bank staffed with highly trained loan officers over an online mortgage broker. When you partner with Sammamish to achieve your home buying goals, everything is done in-house.
While a mortgage broker can only originate loans, and won’t be involved in the process of underwriting, approving, or funding your home loan, a mortgage bank has an entire contingent of professionals who work together to get your loan from preapproval stage to closing.
The key player is the loan officer (LO). An LO is intimately familiar with all of the different loan products available, and capable of offering advice in choosing the right mortgage option and tailoring your loan product to fit your specific needs. They work hand in hand with transaction coordinators, loan processors, and underwriters to help you successfully purchase your home.
However, you should still ask about how the LO is paid, as some lending institutions also use the commission system. Finding a bank that pays their LOs a generous salary so they can provide you with solid, unbiased advice is a good way to get the best home loan possible.
After reading all of the above, if you do still want to try a Seattle mortgage broker, make sure to ask these questions first and carefully consider the answers before you make your final decision:
A mortgage broker who is using a scattershot approach to get a bunch of lenders to respond, who depends on algorithms rather than research to find loan options, or who doesn’t seem interested in your needs will probably not get you the loan you deserve. If they depend on commissions to make their living, their advice can be biased and more focused on getting a big commission than getting you the best loan.
At the end of the day, you’re the one responsible for making the final decision about what lender to apply with and what loan product to sign up for. You’ll need to know about interest rates, loan terms, amortization and more to make an informed decision.
The right advisor is critical to this process. Make sure you have an expert on your side, whether you opt for a Seattle mortgage broker online, or a professional loan officer from a mortgage bank.
Loan limits are dollar amount caps placed on a mortgage. Different types of loans have different limits.
Loan limits are assigned to (and vary across) each county in every state across the country. They typically increase at the start of every year to reflect the growth in home prices.
Check out our mortgage loan limit tool for conventional, FHA, and VA loans.
Sammamish Mortgage is a family owned, local mortgage bank serving the broader Pacific Northwest region, including Washington State, Idaho, Colorado, and Oregon. We are proud to offer a wide variety of mortgage programs and loan products with flexible qualification criteria.
Please contact us if you have any questions or are ready to apply for a home loan. One of our salaried loan officers (LOs) will be happy to help you get preapproved for the Seattle mortgage that is right for you.
8:30 am - 5:00 pm Pacific