A mortgage broker is a person who acts as an agent who brokers mortgage loans for other people or companies. Mortgage brokers work by obtaining mortgage loan applications from people who require loans for home purchase, residential or business mortgages. They make the mortgage applications available to the clients for processing and comparing mortgage quotes. The mortgage brokers can be referred to as sub-prime mortgage brokers, retail mortgage brokers or wholesale mortgage brokers. Brokers may also act as third party processors or agents for large financial institutions or individuals.
Mortgage brokers need to have some qualities in order to perform well in the role of loan processors and agents. Since mortgage intermediaries have to find and obtain loan applications from a large number of applicants, they need to possess the qualities of quick thinking, organized and hard working. Mortgage intermediaries should have knowledge about mortgage programs so that they can provide the right type of advice to their clients. They need to be able to assess the suitability of different financial options for individual borrowers.
The main responsibility of the mortgage broker is to find the right lender for a borrower. It is the duty of the mortgage broker to contact lenders and present the borrower’s loan application to them. Once the lender finds a suitable lender for the borrower, the mortgage broker will suggest the borrower a plan of repayment. He will explain the terms and conditions of the plan to the lender and then close the deal with the lender. The mortgage process is completed successfully when the lender agrees to approve the plan.
Brokers have to follow all the laws of the country and ensure that the documents and paperwork are complete and accurate. Mortgage brokers are well aware of the requirements of the lender and meet these requirements by presenting the loan application on time and avoiding extra paperwork. Mortgage brokers are involved in the entire loan process from submitting the loan application to getting approval from the lender. They need to handle all the paperwork well and make sure that everything is submitted accurately.
Paying fees and commission are two other sources of income for mortgage brokers. They may receive commissions from the lender or mortgage company on successful loan applications. Mortgage lenders do not charge any fee for this service. Paying fees and commission can be considered an added service by many mortgage brokers and not as a taxable income.
Brokers play an important role in the processing of mortgage loans. They make sure that every aspect of the loan processing is properly completed and submit the paperwork to the appropriate lender. This is a multi-step process and sometimes loan officers might skip steps or work on the wrong documents leading to rejection by the financial institution. An efficient mortgage broker will always make sure that the paperwork is complete and submitted to the financial institution before the due date.
A term mortgage broker plays an important role in loan origination and servicing. This person not only handles loan applications but also has an active role in the loan officer’s decision making process. The loan officer receives instructions from the client regarding the application and servicing as well as servicing process. This ensures that each step is carried out correctly. A term mortgage broker’s main function is to ensure that the lender obtains the best possible deal and offers the client the lowest interest rates.
A mortgage broker is also an independent loan officer working for a single lender or many lenders. These independent loan officers have their own departments responsible for approving and servicing loans. Working solely for one lender, these employees use their knowledge and experience in order to approve clients who meet the requirements of the lender. A mortgage broker does not provide any direct input to the lender or his decision.