Need a mortgage or other loan? There are benefits in working with a good mortgage broker. In fact, a good mortgage broker can save you time, money and loads of frustration. But to know why a mortgage broker can be so valuable you need to know the difference between the mortgage broker and a direct lender.

A direct lender is like your bank or another mortgage company that has their employees work with you to get their loans. A direct lender typically only has a few loan programs and they are unable to work with anyone who doesn't fit their required borrower profile. It is like fitting a round peg (you) into a square hole (a bad loan program), something may not be good for you.

Perhaps the worst part of working with a direct lender is what happens if you are disapproved. Get turned down and you have to go shopping again, normally getting new sets of documents and appraisals. This can lose you valuable time and thousands of dollars.

A mortgage broker is an independent professional who specializes in originating mortgages. In contrast to an originating lender, brokers work with a number of lenders, perhaps 40 to 60, and therefore have access to many of the loan products available on the market.

Since they don't have to try to fit you into a specific loan program, they help discover the best loan program that compliments your circumstances. A potentially good rate and terms for your loan is only a mouse click away for your mortgage broker.

One huge benefit of using a mortgage broker is that they know how to package your loan application to make it look as good as possible. This means that you have a greater chance of being accepted and can offer better terms than a bank. If you are turned down, the mortgage broker can immediately start working with another lender, often using the same documentation, saving you time and money.

The mortgage broker does this because they work on a commission. Unlike the direct lender's loan officer, the mortgage broker has a strong motivation to get your loan approved and closed. This can be a win-win situation for you and the mortgage broker.

Good mortgage brokers are gold, but you have to choose the right one for you. Some are better than others are and you want a good one. The best place to start is to put together a list of brokers by asking friends, co-workers and neighbors for referrals. Interview mortgage brokers over the phone. A top broker will know your particular market, especially the recent trends in real estate financing. They should be able to give you some good ideas for financing programs over the phone.

Ask them their experience. At least four to five years of experience is ideal, but someone new at the game may devote more energy to your sale and be more negotiable on the commission. Also, someone who has past experience as a real estate agent can have good insight into borrowers' needs.

When you've narrowed down your list, ask the top three contenders to come by your home. At the first visit they should interview you about your goals and expectations for the financing, present their qualifications and explain their typical approach.

Get the phone numbers of the last three borrowers they've worked for so you can interview previous clients about their experience. Once you are done checking them out, tentatively chose one and invite them for a second interview. At this time the mortgage broker should give you a solid recommendation for the type of financing to pursue, and what needs to be done to attain it.

By combining professional expertise with direct access to multiple loan products, a mortgage broker provides borrowers the most efficient and cost-effective method of obtaining suitable financing. You can get a professional to track down the best loan tailored to your specific financial needs. It doesn't cost you a cent. Now those are good benefits for using a mortgage broker.

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