When you are planning to buy a home, there are many things that you must consider. One of the most important is how much money it will take for you to purchase your home.
This is where mortgage brokers and realtors come into play. While they both assist clients in buying a home, they do so in different ways.
Mortgage brokers work with lenders who offer mortgages. In comparison, real estate agents represent buyers by finding their properties based on their needs. In this article, we will cover everything you need to know about the two.
So, what’s the difference between a mortgage broker and a realtor? Keep reading.
Mortgage Broker: Who Is It?
Mortgage brokers are often known as “loan officers.” They help clients with purchasing a home by providing them with numerous loan options. They can either provide their services to banks, credit unions, or direct lenders, among others.
They can also provide you with options for a conventional loan, FHA loans, and other mortgage programs. In most cases, they will charge an origination fee (usually around one percent) to process your home purchase application. It is also usually paid by the lending institution.
They are best known for bringing together borrowers and lenders. A person wanting to become a broker should meet specific requirements. For instance, having at least two years of experience in the lending industry.
They are also not to be affiliated with any particular lender. In Canada, they must have successfully completed the approved educational course and exam for Mortgage Brokers within three years of applying for a Mortgage Broker license.
The Mortgage Broker’s Role in the Home Buying Process
The mortgage broker’s role is to shop around and look at multiple lenders on your behalf. They can do this because they are not tied down with any lender. Talking to multiple lenders everyday allows them access and “relationships” that a typical agent may not have.
A good broker will be using their relationships to get the best loans possible for their client. This often occurs at rates lower than what an individual could negotiate on their own. Check out this mortgage calculator to see how potential rates can impact your mortgage payments and total cost of buying your dream home.
Realtors: Who are they?
A realtor is a person who assists people in buying and selling homes. Different regions have different licensing requirements, however, they are usually similar across the board.
Depending on their needs, a realtor helps clients find suitable properties in their local area or even outside of it.
If you’re looking for a commercial property rather than residential, your agent will most likely be able to help you out with that. They have access to more listings that are usually listed online for both residential and commercial.
A person looking to become a realtor should also meet certain requirements. These include knowledge of the local market and experience in buying or selling properties for at least two years.
In Canada, they’ll need to provide proof of registration in the Residential or Commercial Trading Services Applied Practice Course when you apply to BCFSA for your license. They should also be carrying insurance and maintaining with the National Association of Realtors.
The Realtor’s Role in the Home Buying Process
A realtor’s role is to play matchmaker between potential buyers and sellers. A Realtor can facilitate the sale of your home. They can act as a liaison, provide market insight on homes in your local area, or even represent you at an open house.
The list of things they do for their clients goes on and on. Ultimately, it boils down to one thing: connecting you with someone who wants to sell (and buy) a home just like yours.
When choosing which professional will help guide you through buying or selling a home, consider how vital “relationships” are when determining if that real estate agent will be able to meet all your needs. Also, consider whether you should go with a mortgage broker who has access to and relationships with multiple lending institutions.
The Main Difference Between a Mortgage Broker and a Realtor
While both your mortgage broker and real estate agent will help you buy your dream home, each one does it in their own way. The Realtor’s role is to match people with properties (sellers) while the Mortgage Broker helps clients find the best deal with the best rates for their mortgage.
Another difference between a mortgage broker and a realtor is how they charge for services rendered. Your agent may work on commission which means they get paid only if the sale of your property successfully closes.
Most brokers do not operate this way, mortgage brokers usually get paid by the lending institution, usually about 1% of the value of the mortgage loan.
Both can provide invaluable assistance throughout all aspects of buying and selling a home, but it’s essential to have a clear understanding of what you’re getting for your money.
Your Real Estate Needs Tended To
Now that you know the difference between a mortgage broker and a realtor, consider who would be best to help you through buying or selling a home according to your needs, what services they can provide, and how much it will cost before making any final decisions.
This way, you’ll have peace of mind knowing that whoever is helping you out has everything under control. All you need to do is sit back and enjoy the ride! Find the nearest mortgage broker now to find the best mortgage rates for you.