A home purchase can be an enormous commitment, possibly one of the biggest financial decisions you ever make. The process of acquiring a home loan and closing on your house can take weeks and is complex. You may be wondering if you should find an Oregon mortgage broker to facilitate finding a lender and getting your mortgage application started.
Going online to get information about lenders and mortgages is a common practice, and there are plenty of ads for Oregon mortgage brokers promising to help put you in touch with a multitude of lenders and offering a range of home loan options. However, not everything about mortgage brokers in Oregon is as clear cut as it might seem..
A mortgage broker specifically works in the field of loan origination. Typically, they’ll hold a bachelor’s degree (usually in accounting, business, or finance). They might also have finished a certification or pre-licensure program. Regardless of the state(s) they practice in, mortgage brokers must pass the National Mortgage License System (NMLS) Loan Originator exam and be bonded. They may also need to apply for a state business license.
Mortgage brokers act as middlemen, matchmaking between borrowers and lenders. They are independent, and don’t work directly for lenders or loan companies. Instead, they rely on contacts from a network of financial institutions and online lenders, including big banks and credit unions.
You might find an independent mortgage broker or one who is employed by an online mortgage broker company or mortgage brokerage. They gather information about you and pass it on to lenders, working with underwriters to get loans approved. However, they don’t fund any loans or act as a lender.
Borrowers who choose an Oregon mortgage broker want a mortgage expert who will discuss loan options with them, gather and transmit information and documentation to lenders, and negotiate items like the loan interest rate, down payment, and closing costs.
Sadly, not all brokers are created equal. Many brokers simply use an algorithm to predict how big of a loan you may be able to afford, then pull a bunch of automated quotes from lenders and ask you to pick one. There’s no real attempt to understand your finances or help you get the best loan product for your needs.
Another thing to understand about mortgage brokers is how they get paid. Either they can charge you or they can charge the lender, but never both, due to the Dodd-Frank Act which prohibits dual compensation to protect borrowers from predatory behavior.
There are no exceptions: the broker has to choose from the outset who pays them. If you pay, they can’t get any kickbacks from the lender. If the lender pays, they can’t charge you fees like loan origination or discount point charges.
The important factor is whether the broker is paid a commission or a flat fee. If there is a commission based arrangement with the broker, they can expect to get anywhere between 0.5% and the federal cap of 3% of your total loan amount, meaning the bigger a loan you get, the more they get paid. Different lenders offer brokers different percentages, too.
When borrowers pay mortgage broker fees, cash is due at closing. If the lender pays, the commissions or fees are handled right after closing without involvement from the buyer.
Obviously, there can be some concern about bias, as the type of payment and its relationship to the amount of the loan plus the size of the percentage offered by the lender can all influence the broker’s recommendation. You don’t want to get a home loan based solely on which lender offered your broker the most attractive fee.
A lot of home buyers think that shopping for a mortgage online necessitates using an Oregon mortgage broker. That’s not the case; while brokers can introduce you to a wealth of lenders who can prequalify you swiftly online, that’s something you can do yourself, and it’s not the same as actually applying for a mortgage online to get fully preapproved. For that, a mortgage bank can be a much better option.
You don’t have to physically visit a bank location if you work with a lender who has technology for online lending set up. You can simply fill out your information, submit all of the documents needed for verification through an easy to use portal, complete the home loan application online, and give approval for a credit check. Once your information is verified and your home loan amount preapproved, you’ll get a preapproval letter that you can show sellers and real estate agents for proof that you’re a qualified buyer.
When you work with a modern mortgage bank that gives you these options, you benefit both from the convenience of applying for your home loan online, and having a seasoned professional on hand to help you whenever you need it.
At Sammamish, we make it easy for you to complete your entire mortgage application online, and guidance from a salaried loan officer is always available to you, from the preapproval stage to closing on your new home.
A mortgage bank or traditional lending institution underwrites and funds loans, completing the entire home loan process. A mortgage broker helps with loan origination, and may provide support through closing, but doesn’t set rates or provide the actual lending services. They don’t have a formal relationship with the lender.
A loan officer (LO) is typically an employee of a bank, credit union or other lender. They provide more personalized services, giving you advice about the type of home loan that would be best for your specific financial situation, and helping tailor a loan product so it’s just right.
However, some LOs get paid a commission just like a broker, which leads you back again to the risk of being offered a loan that results in the biggest commission for the LO, and not the most reasonable or affordable one. Look for a mortgage bank that pays their LOs a salary instead of commission to help remove bias and ensure you’re getting straight advice.
If you opt for a Oregon mortgage broker, these questions should be asked before you decide who to trust with your loan process:
A mortgage broker who simply gathers information and spams it out across a vast network of lenders may not be delivering the customized services you need, and probably won’t get you the best home loan terms possible. By asking pointed questions about things like preapproval letters and locking rates, you can get an idea of how knowledgeable they are and if they will be actively pursuing these things on your behalf.
Finding the best mortgage provider and shopping around for the best interest rate and lowest loan costs is ultimately your own responsibility, whether you use an Oregon mortgage broker or a mortgage bank loan officer.
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 Oregon mortgage that is right for you.
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