Mortgage Broker FYI

A mortgage broker can be helpful in the lending process. A broker does not
lend money; instead, they are a company which offers loans from a variety
of lenders. The lender still controls the terms of the loan and makes the
final decision on whether to offer the loan.

The broker is given a wholesale loan rate from lenders. They then offer
loans to consumers for a higher, or retail rate.

Brokers provide a number of services to consumers. By dealing with a large
number of lenders, brokers are able to find specialized loan products for
almost any type of borrower. Borrowers in unique or difficult situations,
including, for example, those residing in foreign countries or those who
have a short window of opportunity on a property and need to close quickly
may have a difficult time getting the appropriate service from a lender. A
broker, however, is better-equipped to deal with a variety of problems.

Brokers can also advise prospective borrowers on their financial situation
and explain to them any problems that they are likely to face when
applying for a loan. In meeting with borrowers, brokers get a better
picture of their goals and borrowing ability and use that knowledge to
find the best loan possible for their clients.

Brokers also provide a valuable service to lenders. Aside from the obvious
business-development services, brokers assemble the information required
on a borrower and on a property for the lender. They also provide the
borrower with the various federal and state disclosures that lender is
required to furnish.

The ability to shop a larger number of sources for loans makes the
broker's service a valuable one. The wholesale rate that they are given
means that some of the cost for the broker's service is borne by the
lender. This cost is returned to the lender through not having to do as
much legwork to sell a loan.