A mortgage broker is a
that loans out money based on mortgages to individuals or small businesses. Usually, banks are the ones that sell middle man loans but with the great increase in market the role of a mortgage broker has become very important. These brokers are present in the market to identify a bank or a lender that is ready to lend out loan to customer who requires the money. Usually, every mortgage broker is regulated by a government agency or the government itself.
Various Duties performed by a Mortgage Broker
The different types of duties performed by a mortgage broker include investment banking, private banking, corporate banking, business banking, land mortgage banking, or retail banking. The scope of every mortgage broker varies are per the area. In addition to performing the above-mentioned tasks, a mortgage broker is supposed to:
- Bring in more clients.
- Evaluate and assess a borrower’s
conditions; these include the credit history of the borrower and the ability of the borrower to repay the loan.
- Fill the lender’s form that is required for processing the loan.
- Clearly explain all the procedures and processes that are required to
- Submit all the documents that are important to process the loans to the lender.
- Help the clients in saving as much money as possible.
What is the difference between a loan officer and a mortgage broker?
A loan officer primarily works for the lender, whereas the mortgage broker works for both the lender and the loan borrower. Another difference here is that a mortgage broker makes more money when compared to a loan officer. A mortgage office is typically registered with the
government whereas a loan officer is registered under the institution of lending.
Other characteristics of Mortgage Brokers
The major segment of this industry is based on commission. Mortgage brokers can help the customers
to get loans from secondary loan lenders, too. In addition to this, brokers have extensive knowledge about different interest rates and suggest the best interest to their customers.
Over time, the laws for mortgage brokers have improved toward consumers. Initially, mortgage brokers were used to overcharge their
customers but now with the improvement in the laws, the overcharging for loans have considerably increased.
Fraud practices followed by mortgage brokers
The following points need to be kept in mind while engaging a mortgage broker.
- If the broker submits a false
income assetor other documentation, it is a bad sign.
- Some mortgage brokers force their clients to refinance their loans without explaining all the benefits.
- Few mortgage brokers have the ability to influence loan borrowers to take more money than required.
Three important factors to consider while looking for mortgage broker
Reputationof the mortgage broker – The reputation of the mortgage broker is a crucial aspect that needs to be taken into consideration while looking for a perfect broker. It is a good practice to conduct enough online research about a particular broker before choosing one. Also, it is completely okay for a customer to look for testimonials of a particular broker before making the choice.
- An independent lender will have access to almost all the loans available in the market. So, it is better that you avoid looking at limited lenders who look at only a small panel of lenders. Usually, independent lenders evaluate all the options available except the ones that are directly offered.
- Some brokers have access to broker-specific deals that are usually not revealed to customers who directly approach the lenders.
Overall, a mortgage broker can be helpful in many ways, as they are always present in the market for the clients. They make lending task easier, hence, it becomes easy to borrow money from a bank. However, make sure you are not involved in any fraudulent practice.