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Buying a home in Idaho can be an exciting, complicated, and changing experience. It’s possibly one of the biggest financial decisions you’ll ever make, and the process of getting a mortgage and closing on your new home can be a drawn out process. Finding an Idaho mortgage broker may be advice you’re getting from several quarters, but there’s more to getting a mortgage loan than that.
If you have been looking online for information on mortgages and home buying, you’re likely seeing plenty of ads for Idaho mortgage brokers who offer the moon, claiming to put you in touch with the best lenders and get you the lowest mortgage rates. However, mortgage brokers in Idaho might not be your best option when it comes to the personalized service you need when making a massive purchase like a house!
Mortgage brokers’ bread and butter is originating loans. They are business professionals; mortgage brokers must pass the National Mortgage License System (NMLS) Loan Originator, and may have completed a specific certification or licensure program as well as a bachelor’s degree in finance, accounting, or business. Depending on what state(s) they work in, they may need to hold a business license as well, and they must be bonded.
Mortgage brokers are basically the matchmakers of the home loan world. They don’t fund loans, but they try to pair up would-be borrowers with lenders, in return for a fee or commission on the loan amount. If you work with a broker, you could end up with a big bank, a credit union, or an online mortgage provider.
Independent mortgage brokers depend on relationships with financial institutions to find mortgage options for their clients. Other brokers may work for a larger brokerage, and have access to an even bigger network of lenders. A broker takes your information, and passes it along to lenders to get mortgage quotes, then works with the underwriter to get your loan closed so they can get paid.
Depending on their experience and allegiance to specific lenders, broker may or may not give you access to all loan options available. You should carefully research brokers and check references to make sure they can give you what you need in the way of handling documentation and verifications, and negotiating terms like your loan interest rate, down payment, and closing costs.
Brokers that do extremely high volume are often just leveraging an algorithm that will “prequalify” you based on information you provide without verifying that information, then send out the info to a bunch of lenders to get automated quotes. By choosing a more dedicated loan professional, you can get the personalized attention required to tailor a loan product to your needs.
A murky part of using a mortgage broker, and one that can really affect the quality of your home loan and how much it costs, is how they get paid. If you pay the fees, they are due at closing. If the lender pays the fees, they settle with the broker after closing.
The Dodd-Frank Act prohibits dual compensation, which means that a broker has to choose between getting paid by the borrower, or by the lender. There is no double dipping, and the fee can’t be split. For example, a broker can’t charge you a loan origination fee or a fee for discount points, and then turn around and get a commission from the lender.
Speaking of commissions, if the broker is charging by commission instead of a flat fee, bias can quickly come into play. They will want to sell the biggest loans they can since they will be getting a percentage of the loan amount (typically between 0.5% and 3% (the federal cap), and they may favor lenders who give them a bigger slice of the pie.
A common misconception is that if you shop for a home online, you need an Idaho mortgage brokers help. What you really need is to start your home buyer journey by getting fully pre-approved for a mortgage by a reputable lender like a well-known mortgage bank.
You don’t need a broker if the lender you use has the right technology. If they have an online application system with a secure portal, all you have to do is fill in your details, upload the supporting documents needed for verification, give permission for a credit check, and you’re on your way to getting your pre-approval letter.
At Sammamish, we have all of the above, plus salaried loan officers standing by if you need personalized help — from the start of the preapproval process all the way to your closing date.
Wavering between using a mortgage broker or a loan officer (LO)? Here’s the difference.
A broker works for themselves or for a mortgage brokerage, and has nothing to do with the final lending decision or funding of your home loan. They simply originate loans, and can provide assistance throughout the application and approval process.
A loan officer (LO) works for a bank, credit union or loan company, and has a more hands on approach, working with other people in their institution to coordinate your loan from application to funding. They can provide personalized advice about home loan programs and help you get the loan you need for your specific situation.
Be aware that there are LOs who are paid on commission, and, just like a broker, this may mean bias in what loan products or loan sizes they recommend. Choosing a respected mortgage bank where LOs get a generous salary no matter how big loans are can help provide assurance that your best interests are the priority.
If you do decide that an Idaho mortgage broker may be your preference, asking these questions can help reveal if they are up to the task:
A mortgage broker who just takes down your information and then just sends it out to lenders with no research into your needs means you aren’t receiving personalized service. By asking about preapproval, rate locks, closing and supports, you can learn if a broker is really a professional ready to give you their all.
In the end, it’s up to you to shop around for the best interest rate and lowest loan costs and choose the best lender, whether you opt for an Idaho mortgage broker or a more customized approach from a seasoned LO.
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, California, 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 pre-approved for the Idaho mortgage that is right for you.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.