At times there is confusion as to the difference between mortgage brokers and lenders. The lender provides the actual loaned money, whilst the mortgage brokers will act for the borrower and work directly with the lender Mortgage brokers could work either with a company or independently.
The brokers job is to shop around for the client to be able to get the right loan contract. To be able to make sure that their customers get the right loan possible, they have to work directly with numerous lenders. It is normal for a broker to have upwards of a hundred lender agreements. Thus, brokers could more likely assist clients who have specialty requirements, like problem credit, than individual lenders are.
The process for acquiring a loan is simple. Borrowers give their applications to their mortgage brokers, who then use that info in order to find a lender and lock in terms and rates. Federal and state disclosures are likewise provided. Credit reports, employment verifications, asset disclosures and property appraisals are obtained by the brokers and given to the appropriate lender when the application is deemed complete. It is then the duty of the lender to handle the disbursement and loan approval.
One more common responsibility of a mortgage broker is to provide their clients with basic credit counseling. This is to be able to help the borrowers correct whatever credit issues which they might have, as well as to advice them on methods they could acquire better loan rates. Brokers break down the process of application and ensure their clients understand each and every detail of their loan. However, as soon as the loan method is complete and the borrower has obtained a mortgage, the borrow is unable to provide any additional assistance. Any future questions need to be asked of the lender.
In exchange for bring lenders and borrowers together brokers generally earn a small commission. The broker is indirectly paid by the buyer through additional loan points or closing costs. It isn't until after closing the loan that the mortgage broker is given payment.
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