WA State Mortgage Broker: Is a Broker the Right Choice?

October 4, 2020
Last updated:
January 10, 2024
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Buying a home might be the largest biggest purchase you will ever make. Getting a mortgage and closing the loan can be a long, complicated process. Do you need a WA State mortgage broker to help you find the right loan product and lender?

Many home buyers go online to look for information about a mortgage and immediately find WA State mortgage brokers offering to provide a list of lenders and loan options. However, there are some things you should know about mortgage brokers in Washington State before you decide to use one to get your home loan.

Who a WA State Mortgage Broker Is

Most mortgage brokers have earned a bachelor’s degree in business, accounting, or finance, and may have completed a certification or pre-licensure program. Mortgage brokers typically have to pass the National Mortgage License System (NMLS) Loan Originator exam, and may also need to hold a business license for the state(s) in which they operate and be bonded.

Mortgage brokers aren’t lenders. They also don’t work directly for companies that offer home loan products. Instead, they are a kind of middleman, who can help facilitate loan offers from a variety of lenders including banks, credit unions, and other types of lenders.

What a Washington Mortgage Broker Does

Mortgage brokers may be independent, or work directly for a mortgage brokerage or an online mortgage broker company. They don’t lend money directly, but work with underwriters at lenders to pass on information about you and your finances.

Ideally, a Washington mortgage broker will communicate with you and gather a large amount of information and documentation from you to understand your financing needs. Then they will carefully research available loan options and negotiate with lenders on your behalf regarding your interest rate, down payment, and closing costs.

That’s not always the case, however. Some brokers may simply use algorithms to tell them what size loan you may be able to afford, then pull automated quotes from a bunch of lenders and present them to you to choose from before moving forward.

How Mortgage Brokers Get Paid

A mortgage broker can be paid directly by you, or directly from the lender. The Dodd-Frank Act prohibits dual compensation, so a broker can never get paid from both borrower and lender.

This applies to all payments; a broker can’t even accept a finders fee from a lender if they are getting paid by a borrower, and cannot charge the borrower a loan origination fee if they are getting paid by the lender.

The amount a broker gets is usually tied to the loan amount: the more you borrow, the more they get paid in commission, anywhere between 0.5% and 3% (the federal cap) of your total loan amount. In some cases, a mortgage broker may offer their services directly to borrowers for a flat fee.

If you pay the mortgage broker fees, expect to cough that cash up at closing. If the lender pays the broker, they usually settle their commission directly after closing, and you don’t have that additional cost out of pocket.

The primary concern with mortgage broker fees is they can influence what lender your broker presents to you as the best choice. Are they guiding you to what is really the best deal on a mortgage? Or are they simply handing you off to the lender who pays them the highest commission rate?

Online Mortgage Application and Pre-Approval

One of the big attractions of a WA State mortgage broker is that it is a quick step from finding a broker to being introduced to lenders who allow online mortgage pre-qualifications. However, not all options are the same. What you really want is a mortgage bank that allows you to start the mortgage application process and get fully preapproved.

Everything can be done from the comfort of your home without having to physically visit a bank location, including submitting all pertinent documents needed for verification and completing your home loan application. You can upload your proof of income, employment, tax information and more through a secure portal and get the pre-approval letter you need to show sellers and real estate agents that you’re a serious buyer.

Working directly with a mortgage bank that provides online options means you get all the convenience of applying online, and still have one-on-one help from a seasoned professional when you need it.

At Sammamish, you can do your entire mortgage application online yourself, and ask for guidance at any time. A salaried loan officer will be happy to shepherd you through the whole process from pre-approval to your closing date.

Using a Loan Officer vs. a WA State Mortgage Broker

The main difference between a mortgage broker and a lending institution like a mortgage bank or company is that the broker doesn’t actually underwrite loans or supply the mortgage funds. They simply help facilitate the origination and closing of loans.

In contrast, a loan officer (LO) is directly employed by a bank, credit union, or other lenders. They are intimately familiar with the loan products available, and can offer advice in choosing and tailoring your loan to fit your specific situation.

Not all LOs are the same, either. Some are also paid by commission and this can lead to a bias in what loan products and loan amounts they recommend. Using a mortgage bank that pays their LOs a salary can help remove this kind of bias and help you get the best advice and best home loan possible.

Questions to Ask a Mortgage Broker

If you do decide to use a WA State mortgage broker, make sure to ask these questions before you make your ultimate selection:

  • How much do you charge?
  • Who pays your fees?
  • How many years of experience do you have?
  • What licenses and certifications do you hold?
  • What types of loans do you have experience in?
  • What type of loan do you think fits me best? Why?
  • What lenders do you work with?
  • Can you get me a pre-approval?
  • Can you get me a rate lock?
  • How long will it likely take to close my loan?
  • Who will be my support contact during the home buying process?

If a mortgage broker is just gathering your information and sending it out to a vast network of lenders, they may not be providing you with the personalized services you need to get the best home loan possible. Asking about rate locks and mortgage preapproval can help you see how involved the broker gets with their clients and if you can expect a high level of support.

Ultimately, it’s your responsibility to find the best mortgage provider and to shop around for the best rate and lowest costs, whether you use a Washington mortgage broker or a loan officer from a mortgage bank.

WA State Mortgage Rates

Important Loan Limits Information

Loan limits are dollar amount caps placed on a mortgage. Different types of loans have different limits.

  • Conforming loan limits are caps placed on loans that Freddie Mac and Fannie Mae will acquire.
  • FHA loan limits are caps placed on loans that the Federal Housing Administration (FHA) backs.
  • VA loan limits have been eliminated since 2020. Some borrowers may still be subject to them if they currently have a couple of VA loans, or have defaulted on one in the past.

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.

Get an Instant Mortgage Rate Quote Today

WA State Mortgage Broker Alternative: Sammamish Mortgage

Sammamish Mortgage is a family owned, local mortgage bank serving the broader Pacific Northwest region, including Washington State, Idaho, Colorado, California 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 pre-approved for the WA State mortgage that is right for you.

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