Market that seems so long ago, when you applied for a home loan, it was assumed you will go to your local bank — the company to kept your cost savings and checking accounts – to also obtain your mortgage loan. I can’t exactly put my finger on the timeframe where this changed but we are now in a more modern era and the process is usually quite different. mortgage broker
Yes, banks and credit unions have a huge market share for home loan origination, a larger amount of market share is now occupied by companies whose business is specifically to originate mortgages.
As you can imagine by looking at the amount of opponents in the market place, there is also a lot of money to be made by the companies that provide or find mortgages for home buyers, not only on the interest, but also on closing costs and other fees. When dealing with companies specializing in mortgage loaning, there are two basic categories of mortgage inventor…
Broker service and Mortgage Broker.
Lets consider the mortgage bank first. When you do business with a home loan banker you are working directly with the company making your loan. Typically the term direct lender is employed to describe a mortgage banker. The home loan banker may well not be considered a home loan servicer, meaning they can be not in the end going to be the company where you make your mortgage repayments, but it is their underwriting decision to determine if your loan complies with the guidelines of approvability. Although a mortgage company is typically limited to the products they are going to offer to borrowers, many home loan bankers maintain relationships with “wholesale” lenders where they can broker loans should a borrower’s request or borrowing profile not meet their own home loan lines.
In today’s mortgage market, mortgage banker underwriters generally make their decisions established on the rules arranged by agencies (FHA, SE TILL ATT DU ÄR, Fannie Mae, Freddie Mac). The trade association associated with mortgage bankers is the Mortgage Bankers Relationship of America.
Next we will look at the Large financial company
A mortgage broker serves the same needs as a home loan banker but in a different manner. The mortgage broker is not really a lender, does not make the ultimate decision to approve or drop a mortgage application but has the luxury of drawing from a huge pool of lenders for consumers to get the right match and obtain home loan approval.
To say that by using a home loan broker creates a central man effect (broker to lender to borrower), and then assume this impact creates more cost to the borrower is not totally fair. Mortgage Agents do not specialize in the retail world of lending options. Most direct lenders, lenders that you can gain access to on your own, have a wholesale department with the sole reason for repairing the loans submitted by mortgage brokers. These departments are commonly referred to as wholesale lenders and they give pricing which is not available to the public and allow agents to be competitive on a retail level with mortgage bankers. I think it is important to point out that on occasion, a wholesale lender will price unusually low to beef up their pipeline of loan originations and a broker can be in position to take good thing about this for you whereas a mortgage loan banker wouldn’t.
In scanning services the mortgage market, both nationally and regionally a broker knows a lender’s specialty. The broker can identify what lender might fit a borrower’s special needs based after an analysis of the borrower’s credit profile. The broker does everything the lender would do — bank checks your credit and work record, arranges for subject search and hires the exact property appraiser — but, once all of this information is compiled, the broker selects a home loan lender that will most likely accept the software based on its financial data and unique information. In some offices, the lenders also are lenders.