What Is a Mortgage Broker in Real Estate?

A mortgage broker is a licensed professional who connects homebuyers with lenders. Rather than funding loans directly, a mortgage broker works as an intermediary between borrowers and banks, credit unions, or mortgage companies to help clients find the best loan options and rates.

🏦 How a Mortgage Broker Works

  • The borrower provides financial details such as income, assets, and credit history.
  • The mortgage broker compares loan programs and interest rates from multiple lenders.
  • The broker assists with the application and manages communication between borrower and lender.
  • They earn a commission, typically 0.5%–2.75% of the loan amount, paid by either the lender or the borrower.

Mortgage brokers save buyers time by shopping multiple loan options and often help secure more favorable terms than a single lender might offer.

⚖️ Pros and Cons of Using a Mortgage Broker

  • Pros: Access to multiple lenders, potential rate savings, and expert guidance through complex paperwork.
  • Cons: Some lenders don’t work with brokers, fees may apply, and not all brokers offer the same loan options.

Buyers should always ask brokers to disclose fees and confirm whether they represent specific lenders or operate independently.

🏠 Mortgage Brokers vs. Real Estate Brokers

Though both have “broker” in their titles, their responsibilities are different. A mortgage broker helps buyers secure financing, while a real estate broker helps clients buy or sell property. FSBO sellers who use Brokerless can handle the property sale directly, while buyers often work with mortgage brokers to arrange home loans.

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Explore more definitions in our Real Estate Glossary .