There are three major advantages to working with a mortgage broker. They include rate, fees, and qualification criteria. Most consumers ask about rate when inquiring about mortgage loans, but data from Fannie Mae indicates that less than 1/3rd of consumers actually shop more than one company when choosing a mortgage lender.
Mortgage brokers have access to wholesale mortgage rates from any retail lender that offers a third-party origination (TPO) agreement. Furthermore, because mortgage brokers can have multiple TPO relationships, shopping different lenders can be done with one mortgage broker inquiry instead of a consumer having to call many direct lenders to shop for the best rate.
Compared to direct lenders, mortgage brokers often have a lower cost of operating and are able to reflect the lower costs through lower origination fees. In most cases a mortgage broker does not charge an origination fee.
Lastly, mortgage brokers are able to match potential mortgage applicants with a compatible lender. Direct lenders can have specific qualification overlays that can disqualify an otherwise qualified borrower. Examples are minimum credit score requirements, property types, loan size, or loan type such as renovation or construction loans.