Ordinarily to buy a home you need a home loan. And for a home loan you need the services of a mortgage broker.

A home loan is a transaction that has two aspects:

1. You promise to repay the money borrowed, which is in the form of a promissory note in California
   
2. You give the lender a mortgage on your home to secure repayment, which is in the form of a deed of trust.

The basic service of a mortgage broker is to assist the borrower in making an informed decision while seeking a home loan.

A mortgage broker needs to be licensed at either California Department of Real Estate (http://www.dre.ca.gov) or California Department of Corporation (http://www.Corp.ca.gov ).The DRE can tell you whether the broker has a current license, the tenure of the license, and whether the DRE has ever taken any disciplinary action against the broker.

Role of a real estate agent in Texas;

1. First and foremost, the broker helps you getting a loan.
   
2. He acts as your agent with the lender.
   
3. He should be honest enough to disclose all-important facts you need to know about the loan. And it is up to you, to understand the terms and procedures of the loan before making any final decision.
   
4. As your agent, it is the broker’s duty to submit your duly filled application to the lender. Again, it’s you, who will give him the correct information regarding your assets, debts and expenses. Check all papers and documents before signing.
   

Commission Of A Mortgage Broker

The broker is paid either by you or by the lender, depending on the agreement. You can pay him

1. With cash
   
2. A certain percentage of the loan sanctioned.
   

Before selecting any broker, compare the fees charged by different mortgage brokers in your area, so that you will have a fair idea. Usually the commission, popularly known as ‘points’, charged by the broker or the lender after the loan is made. Each point is 1% of the loan amount. You can negotiate for less point.

A rate sheet is provided by the lender to the broker stating the current interest rates, terms for its loan products. Before loan approval, your mortgage broker will obtain pre-approval based on the preliminary information provided by you. Only after reviewing those papers and meeting all conditions required for home loan, your loan will be sanctioned. In most cases, a mortgage broker delivers a Mortgage Loan Disclosure statement (MLDS) to you stating the amount of loan, other fees, and costs. However, if the loan transaction is federally related, you may not receive a MLDS, but a Good Faith Estimate conformed to California disclosures and certain Truth-in-Lending disclosures. The rate of interest on your loan is either locked means your interest rate will be locked-in at the time you request for a lock, or floating- can change daily. Your mortgage broker can give you better suggestion.

Other fees

The mortgage broker may ask for application processing fee, credit inquiry fee etc. Here, you may need the help of (http://www.dre.ca.gov). Other costs include escrow services, title insurance, document preparation, recoding fees. Again, it depends on the amount you are borrowing. The more you borrow, the higher the cost and fee.