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You also have the option of working with a mortgage broker — an independent licensed mortgage professional not directly employed or tied to one individual bank or lending institution. Depending on licensing, independent mortgage professionals are known by a few titles (e.g., mortgage broker, mortgage agent). For ease of clarity, an independent non-bank representative and non-bank mobile representative will be called a mortgage broker.

Most mortgage brokers work with a number of financial institutions, including banks, trust companies, insurance companies, and even private lenders. Mortgage brokers work on a commission basis. Their goal is to get you the best deal — a combination of interest rate and terms and conditions. Typically, the mortgage process with a mortgage broker involves you providing him or her with financial information (similar to what you would give to a bank representative) that he or she translates into a mortgage application. The mortgage broker will also need your permission to obtain your credit report. Most lenders will take the broker’s credit report into their system (normally only one credit report is required); however lenders have their own “stale date” periods when they consider the credit report not usable, and a new one must be acquired. Discuss this with the mortgage broker in advance to minimize inquiries on your credit, which could affect your credit score.

Mortgage brokers understand the underwriting policy of the lenders, and generally know in advance how the lender will evaluate your application. His or her job is to put together your application, complete with the required financial information and documents, and present it to several prospective lenders. Once the mortgage application and data collection has been completed, a mortgage broker can shop for your mortgage using technology.

Your application can be sent electronically to a number of lenders, all of whom have the opportunity to review your application and determine if they will make a mortgage offer, and what kind. These individual lenders understand that other lenders are also reviewing and evaluating your application at the same time. If you look good on paper, the lenders will want your business.

Once all the mortgage offers are back (usually within 24 to 48 hours) you and your mortgage broker can review the offers and decide which mortgage is best for you. This allows you to select a mortgage product best suited to your individual financial needs.

Some lenders offer “performance” benefits to mortgage brokers, which can be a benefit to the home buyer. These same lenders assess the mortgage broker’s volume of written mortgages, combined with their default and cancellation rate. When a mortgage broker acquires this status, he or she has the discretionary capability to give rate discounts below what is given to others.

Normally, as long as you are considered a good or “A” borrower, there is no additional out-of-pocket cost for the mortgage broker’s service because he or she is paid by whatever lender you choose. Having said this, it is still recommended that prior to using the services of a mortgage broker you ask up front if there are any fees that you will need to pay for his or her services. More complicated or difficult mortgages, especially if private lenders are involved, may involve paying a mortgage broker fee. Get everything in writing.

Experienced, good mortgage brokers are knowledgeable about the products offered by most banks, trust companies, insurance companies, and private lenders, and are able to recommend a variety of different mortgage options for your consideration. Most mortgage brokers are very motivated and work hard to get their clients a good deal.