A mortgage broker is a professional who brokers mortgage loans for people or companies. They are registered mortgage brokers in most states and are required to have the same professional licensing as mortgage brokers who work directly with lenders. A mortgage broker helps the borrower shop for the best mortgage available and finds the best package for that borrower at the best possible interest rate.
Mortgage brokers work as middlemen. They often work for one or two lending institutions but often get commissions from many other lenders. The commission structure varies from lender to lender, but all include some form of transaction cost. Some lenders require mortgage brokers to "close" a deal after they close the loan while others allow the borrower to select the institution that offers the best deal. This role of the mortgage brokers works in the borrower's best interests because it ensures that they are not getting cheated by a dishonest lender or broker.
A mortgage broker's job from this link is crucial because he or she is a link between the lender and the borrower. In essence, they make sure the loan process goes smoothly between them. The broker does all the preparatory work, such as collecting loan documents, matching borrowers with lenders and finding the best possible deal for each customer. Once the loan process is complete, the broker forwards the information to the lender who makes the final decision.
There are several types of brokers who find mortgage loans for people through the banks. Mortgage bankers (or branch offices) are typically independent of any lender and work solely for the bank. Broker dealers are often independent sales reps who come into contact with borrowers when they are applying for a mortgage loan. Brokers may also work directly for the bank, sometimes working as loan officers or sometimes as loan processors. Mortgage bankers often work in close conjunction with branch offices of the big names in mortgage financing to provide their clients with the most competitive deals. Get more facts about mortgage at https://www.britannica.com/topic/subprime-mortgage.
The mortgage broker is often promoted within the institution as being an added value to the service you are getting from your bank. Sometimes the broker is sent on a referral basis to a specific client; however, there is often some interaction between the broker and the branch manager of the mortgage lender. In a way, the broker's function becomes that of a salesperson for the lender. Some brokers go on to become salespeople with other lenders.
If you have decided to apply for a mortgage loan, you should research the market carefully before making any firm decisions. It is best if you visit local offices of large banks and talk to loan officers about the types of loans available and how they make their decisions. When talking to your broker, ask questions about the different loans available, such as whether or not you will qualify for a loan that has no income verification, no credit check, and a higher than usual processing fee. You might also want to investigate the costs associated with applying for one of these loans. There might be a fee for handling the paperwork and a fee for shopping around. Once you understand the costs, you can decide whether or not you want to proceed with the loan.