What Is a Mortgage Consultant?

A mortgage is the most common way for a homebuyer to purchase a piece of property. Rather than paying the full amount in cash, buyers can finance the cost of the property over time through a mortgage. But determining what mortgage is best for your particular needs and situation can be difficult. That's where a mortgage consultant comes into play.

A mortgage loan consultant can help you understand the various mortgage products available to you at the given moment as well as help simplify the process of applying and hopefully getting approved. Despite the benefits, a mortgage consultant isn't necessarily right for everyone. Continue reading to learn what a mortgage consultant does, who should work with a mortgage consultant, and how they differ from a mortgage broker.

What does a mortgage consultant do?

A mortgage consultant helps a borrower determine the best loan product for their specific borrowing needs. They can offer, compare, and explain the different loan products in the market today and help identify the best loan product for the specific borrower based on their financial situation, which could include amount of downpayment, credit score, debt-to-income ratio, or the type of property being purchased. They also can use this information to "shop around" and secure the best interest rate and loan terms for your specific needs.

It's important to clarify that a mortgage consultant is not a mortgage loan originator. They don't create and underwrite the loan but rather help move the loan process along, working directly with the loan officer. In a nutshell, their job is to first help you choose the right loan program, go through the loan application, and eventually help get you past loan approval to closing.

How does a mortgage consultant differ from a mortgage broker?

Unlike a mortgage broker, an independent mortgage consultant doesn't work with any one lending institution; instead they work with multiple lenders, meaning they have a wider pool of loan products to choose from in order to best serve their clients financial goals or needs. Most mortgage consultants work with a broker agency that gives them a greater variety of products from a wider and more diverse mortgage lender pool. This can include a new loan origination or refinancing an existing loan on a property.

How does a mortgage consultant get paid?

Mortgage consultants are paid a fee for their services, which is a percentage of the total loan amount paid only when the loan is closed. The fee typically falls between 1% - 3% and will vary depending on the specific agent you are working with and should be disclosed through a contract when the relationship begins, as well as detailed on the closing statement if the loan is approved. You as the borrower are responsible for paying the fee, but many times this can be added into closing costs and paid at closing, or in some instances it can be rolled into the loan amount and paid from the lender at closing.

Who should work with a mortgage consultant?

Mortgage consultants aren't right for everyone. If a homebuyer is confident in the loan product they will use to finance the real estate -- for example. if they're going with a conventional loan -- it may not be worth the cost. But if you're looking to use alternative loan programs, like in commercial real estate, or hoping to get a specialized loan program, having a mortgage consultant on your side can be a huge help and reap major savings.

By shopping around and using their expertise and knowledge of the various programs and loan options available, their efforts can save you thousands to hundreds of thousands of dollars on your loan costs over time. As you would with anyone you add to your real estate team, shop around and make sure you find the right consultant, one that is keeping your best interest and needs as their priority and has the experience, knowledge, and right personality that works well with you.