What is a Mortgage Broker?

What is a Mortgage Broker?

A mortgage broker is the arbitrator between the broker company and the individual (or business) who is their client in which is applying for a mortgage loan.  It is the mortgage broker who aids the consumer in achieving their mortgage or refinance loan.

When you are in the process of buying a home, you actually will not have any real contact with the bank or mortgage lending company; your mortgage broker will do all the legal work and keep the lines of communication open between you and your lender.  In some cases, you will not even know who the actual lender is until you receive the finalized paperwork once the mortgage is underwritten.

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So what is it that the Mortgage Broker actually does?

The mortgage broker in numerous ways are much alike a bank; as well as there being several differences between the two.

 When an individual becomes interested in purchasing a piece of property and they will meet with a mortgage broker who begins the tasks of collecting financial data that is important to the loan process.  Financial documents such as taxes, bank statements, pay stubs, as well as obtaining a credit report.

In the event the customer wants to refinance their current mortgage or property, the mortgage broker will need to make a determination of what the current equity value the home or property holds.  Once this value is determined, the broker then calculates a payment and loan period using a “mortgage payment calculator” to determine the loan period and any other specifics of the loan that will be beneficial to the customer.

Once the mortgage broker gathers all important financial documents and anything else that is crucial to the deal at hand, they then will need to establish the appropriate loan amount according to the value of the property, and once that is done, the type of loan that will be funded is then determined according to the best interests of the customer.

The homeowner always does have the option of doing this themselves; and advised to do some research of their own on loan types, etcetera, just to ensure they are not being misguided.

A mortgage broker can do all the rate shopping for you, of course, which is part of their job as well.  After the loan paperwork has been completed a good mortgage broker will find the loan and rate that is right for their customer’s current financial situation.  For example:  Bank A may have the lowest mortgage rates; yet Bank B has low closing costs; however, Bank C has the best deal on both the rates and fees.  Therefore, it would be in your best interest if your mortgage broker put your loan through to Bank C.

The crucial benefit to hiring a mortgage broker rather than to do it yourself is that the broker is capable of evaluating several banks and lending agencies instantaneously; therefore, finding you the best loan and mortgage payment that is available for your current financial situation.

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