In other words, they find a lender for you. A broker's access to several lenders can mean a wider selection of loans and terms to choose from. Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent. Consequently, you should consider contacting more than one broker, just as you should with banks or thrift institutions. Whether you're dealing with a lender or a broker may not always be clear.
Some financial institutions operate as both lenders and brokers.
Therefore, be sure to ask whether a broker is involved. This information is important because brokers are usually paid a fee for their services that may be separate from and in addition to the lender's origination or other fees. You should ask each broker you work with how he or she will be compensated so that you can compare the different fees. Be prepared to negotiate with the brokers as well as the lenders. Knowing just the amount of the monthly payment or the interest rate is not enough.