What is a Mortgage Broker?
A Mortgage Broker is an individual or a company that acts as a liaison between the client and a Wholesale Lender. Typically, the Wholesale Lender lends money to Mortgage Brokers or Correspondent Lenders. The Mortgage Broker utilizes the Wholesale Lenders money, programs and platform to fund the mortgage for the consumer. As a Mortgage Broker, the client typically receives multiple benefits which will be reviewed in detail below. Due to the benefits of Mortgage Brokers, they have been responsible for between 10% of mortgages annually, to as high as 30%.
The majority of mortgages are funded by banks because they have access to home buyers due to their pre-existing relationship with the client. While clients are handling their banking needs, the financial institution has the ability to assist their clients with mortgages as well. Despite the fact that the majority of mortgages are funded through banks, there are numerous benefits of working with a Mortgage Broker. Some of the benefits include:
Benefits of working with a Mortgage Broker
- Mortgage Brokers have the ability to shop your mortgage with multiple lenders to ensure you get the best possible rate. As a result, Mortgage Brokers typically have better interest rates.
- Mortgage Brokers have more flexibility with loan programs. This means that clients with lower credit scores and more difficult financial situations have a higher chance at receiving an Approval with a Mortgage Broker than a Bank or Lender.
- Mortgage Brokers have more creativity in structuring loans due to their experience with multiple Lenders and various types of clients. This results in clients with difficult situations having a higher probability of obtaining a loan approval.
- Mortgage Brokers usually are easier to reach and provide superior service because of a focus on the client experience and work non bank hours.In addition to the above benefits, Mortgage Brokers typically work for smaller companies which creates a situation where it is easier to reach your individual Broker by phone. Many Mortgage Brokers will give the client their cell phone number so that they can be reached after hours, which is very beneficial since many of your conversations may need to take place after hours or on the weekends. Additionally, Mortgage Brokers are typically paid strictly by commission so they tend to be more aggressive in working for their clients. So, if you are interested in buying or refinancing, a Mortgage Broker is the best option for you!