How Mortgage Brokers Save Consumers Over $10,000 on Average: New Research Insights

Recent studies highlight the significant savings consumers can achieve by working with mortgage brokers rather than traditional retail lenders. A study conducted by Polygon Research found that consumers save an average of $10,662 over the life of their loans when opting for an independent mortgage broker. The savings come from lower rates, reduced upfront fees, and the broker’s ability to shop multiple lenders, unlike captive bank loan officers who are limited to their institution’s offerings (Morningstar Press Release).

Key Findings on Mortgage Broker Advantages

The study revealed several important points about the benefits of working with mortgage brokers:

• Higher loan approval rates in Minority Majority Census Tracts: 70% via the wholesale channel vs. 58% in retail.
• Average wholesale interest rate: 6.58% with 115 basis points upfront; retail rate: 6.60% with 148 bps.
• On a $500,000 loan, wholesale channel borrowers paid $5,750 upfront compared to $7,400 in retail.
• VA loans saw even greater savings, with VA borrowers saving an average of $13,432 per loan.

For more details, visit the full study here.

Why Brokers Make a Difference

Mortgage brokers operate in the wholesale channel, accessing multiple lenders to find the best rates and fees for their clients. The study, supported by United Wholesale Mortgage, found that the average rate from brokers was slightly lower than those offered by nonbank retail lenders like Rocket Mortgage and CrossCountry Mortgage. This translates to thousands of dollars in savings on both standard and VA loans, where the savings were even higher.

Ryan Davis, Co-Founder of IMB™, emphasizes, “This study reinforces why loan officers need the flexibility to shop rates across multiple lenders—a freedom that captive bank LOs just don’t have. At IMB™, we empower our brokers with the tools they need to offer the best deals to their clients.”

Nathan Jennison, Co-Founder of IMB™, adds, “Our mission at IMB™ has always been to support loan officers in providing unmatched service and savings to borrowers. This research validates the importance of independent brokerage and the value it brings to consumers.”

The Growing Popularity of Mortgage Brokers

Mortgage brokers have steadily regained market share, with experts predicting continued growth. UWM, one of the industry leaders, has seen broker share reach levels not seen since 2009, driven by a renewed focus on consumer savings and competitive advantages.

Final Thoughts

For consumers and loan officers alike, the message is clear: the independence and market access provided by mortgage brokers can lead to substantial financial benefits. Whether you’re a prospective borrower or a loan officer considering the transition, exploring the broker channel could unlock significant advantages.

For a deeper dive into how wholesale mortgages can benefit both consumers and loan officers, check out Wholesale Mortgages: A Comprehensive Guide for Mortgage Loan Officers. This guide provides insights on maximizing the advantages of the broker channel and enhancing client service as an independent mortgage professional.