Mortgage Broker

A Mortgage Broker is an individual or an organization who for a fee acts as an intermediary person between the borrowers and the lenders. The broker himself does not loan the money to the borrowers, he merely matches the borrower to the lending agency which best suit the borrower’s need. In ideal circumstances the broker will be a trained licensed professional who will have the knowledge and the experience to find the mortgage at the best available rate from a vast selection of lenders. The scope and the nature of work of a broker vary depending on the jurisdiction of the broker. These lenders mostly include all major banking institutions and credit unions. Some of the functions of a mortgage broker are as follows:

• Advice loan seekers about the avrious aspects related to a mortgage and keep him/her informed .
• Analyze the needs of the borrowers and accordingly recommending the lending institutions with best interest rates to the borrowers.
• Collect and attest all the documents from the borrower and applying for the loan in principle i.e. Pre-Approval           
• Help the borrower in filling all the application forms and explaining the legal disclosures to the borrowers
• Submit the completed loan application to the lenders.

Most of the mortgage brokers across the world are regulated by the concerned government institution to ensure proper compliance with financial and banking laws within the jurisdiction of the borrower. A vast majority of the mortgage financing industry works on a commission basis, this lead to a lot of competition amongst brokers. A broker is able to able to provide better services to the borrowers than a traditional banking institution as the broker incurs lower overhead costs due to a smaller organizational structure. In order to protect themselves, the borrowers must do their homework before the go to a mortgage broker shopping for a loan. A borrower must inquire with a few lenders first directly and then approach a broker to see if the broker can better the interest rates on the loan. This way a borrower ensures that he/she is not being duped by the broker.
Sometimes people tend to confuse the mortgage broker to a loan officer, there is a major difference between the two, the mortgage broker is working for the borrower and the loan officer usually works directly for the lender.