If you are looking into purchasing a home, you may be tempted to use a mortgage broker. But, what role does a mortgage broker play, exactly?
Technically, a mortgage broker acts as a mediator between a client and a lender. Mortgage brokers can act on behalf of an individual, or a business, and a mortgage broker often adheres to specific regulations set forth by certain banking and finance laws. If you are still scratching your head and wondering, “what is a mortgage broker?” you are not alone.
The fact is that a lot of first time home buyers never really understand what a mortgage broker does, but there are approximately 53,000 mortgage brokerage companies within the United States alone. These companies employ nearly 418,700 brokers, and 68% of the loans that are handled within these companies are residential loans. In short, you will likely be dealing with a mortgage broker when you set out to purchase your home.
So, what is a mortgage broker, and how are mortgage brokers different from loan officers? While many people feel as though a mortgage broker and a loan officer are relatively the same, the two occupations are drastically different. A mortgage broker will work to appease both a lender and a buyer, while a loan officer will solely for a lender. All mortgage brokers must be licensed according to state regulations, though both mortgage brokers and loan officers will stand to greatly benefit from your business.
Traditionally, a mortgage broker will gain more income than a loan officer, but loan officers will have greater access to different lender resources. If you are still decided whether or not to use a mortgage broker, think of this occupation as a person that exists in order to help you negotiate the best loan possible. In fact, many people are now turning to mortgage brokers in order to leave the haggling up to another person – much in the same way that a stock broker will handle your portfolio with ease.
Hopefully, this article has shed a bit of light upon the question, “what is a mortgage broker?” and you will be able to make an intelligent mortgage choice when it comes to purchasing your next home. Mortgage brokers can be found strewn throughout the Yellow Pages, and all over the internet, but it is recommended that you research each broker thoroughly prior to hiring any individual. More often than not, the best mortgage brokers are found through referrals, and the Yellow Pages should generally be reserved for ordering pizzas.
Aazdak Alisimo writes about
home loan mortgage brokers for HomeLoanMortgageBrokers.com.
