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Mortgage Broker – Show Me The Loan!
True or False: Mortgage brokers use their own capital to fund mortgages. The answer is false. Where mortgage bankers (lenders) use their own funds to subsidize mortgages, the role of a mortgage broker is to match buyers with financial originators who provide the loans. The wonderful advantage that a broker has over an average Joe walking into a bank for a loan is the broker has developed a close relationship with the lender and receives loans at a better interest rate than the average buyer. Finding a mortgage broker is not difficult; finding a reliable and well-informed broker is another matter. In some rare circumstances, a mortgage broker is a branch of a mortgage lender.Who Can You Trust
The National Association for Mortgage Brokers (NAMB) educates, certifies and represents mortgage brokers. NAMB works closely with the government and understands regulations regarding mortgage practices. A mortgage broker who belongs to NAMB must uphold a strict code of ethics. Many well-known mortgage companies are licensed brokers such as Bank of America.
Another route to finding a trustworthy mortgage broker is through online mortgage services such as Lending Tree. Lending Tree's speciality is to hunt for the best broker for a particular buyer from a vast directory of gung ho professionals. A guaranteed three or more brokers eagerly bid for your business through the magic of Lending Tree.The Bottom Line
Financial mortgage originators are commonly commercial banks, S&Ls (savings and loans), insurance companies, and pension funds. Since the goal of mortgage brokers is to act as the middleman and bring in high volumes of sales, these originators are willing to reduce their interest rates and other associated fees in hopes of more business.
A reputable mortgage broker is willing to explain every option available and recommend a loan that is in your best interest. A broker who wishes to rush the process does not have your long-term interest in mind. Since a well-informed buyer is a more apt to not default on his loan, many brokers have online education, “Question and Answer” sections, and free no-obligation mortgage calculators for buyers to consult in the privacy of their home.