He does all type of research work in market for his client to avail him with the best opportunity and settles down the process also. Generally, the borrower doesn’t have to pay any amount for the service provided but the lender pays certain amount, which can be termed as commission when the mortgage is settled.
There are 3 classes of mortgage brokers. And these are not just regulated by any other body but the FCA (Financial Conduct Authority) and each differs according to range and scope they offer.
Types of Mortgage Brokers
- Tied brokers – They give you products or properties from single lenders.
- Multiple tied ones – They provide mortgage products from a selected panel of lenders.
- Regular market brokers – They offer access to all mortgage products that are available in the market.
From the above-mentioned types of brokers, we can select whole of mortgage broker as the best option for us, because they are free to find the best deal on your mortgage by comparing all the options prevailing in the market.
They can search better deals by using their contacts with a variety of lenders, some of whom you may not know about. They will help you to know about different rates prevailing in market and choose the best out of it. They save our valuable time and also lower our work pressure by doing it themselves. Many lenders, particularly those who offer specialized mortgage products, tend to operate or work on their own via different brokers. Doing so gives these mortgage brokers the benefit offering deals that are not available easily.
How Do Mortgage Brokers Work?
The mortgage broker gathers all-important information such as income, asset, and credit report in order to assess the borrower’s ability to obtain financing. After gathering vital information, it becomes easier to determine appropriate loan type and amount which is more feasible for borrower. During loan process, the mortgage broker communicates with both the bank and borrower to ensure everything runs smoothly.
Mortgage broker must be licensed and complete a criminal background check including fingerprinting. Licensing requirements may vary from state to state. Some states require credit check and minimum experience.
Disadvantage of Dealing with Mortgage Brokers
Brokers are not known nationally although they may be well recognized and known locally. Some borrowers find comfort in dealing a lender with a recognizable name. Sometimes mortgage brokers don’t guarantee estimates, which can be harmful for the borrowers. They present you with offers from various lenders to choose from. In many cases, the lender changes the term based on your actual application and one may end up with paying a higher rate or hidden or additional fee.
Get the Best Mortgage Deal
It can be a good idea to combine and compare deals only available via a broker with those only arranged directly to ensure yourself that you are not missing out the best mortgage deal for you. This will give you a full picture of the products suitable for your circumstances.
On other hand, factors that should be considered are what is the introductory periods along with the average fee that would be charged. Whether you end up arranging your mortgage direct or through a broker it is important to be aware of cross selling also. Ultimately, finding the best possible deal will help you to make big savings over the term of your mortgage with mortgage brokers.
- Thomas J Pinkowish
- Publisher: Cengage Learning
- Edition no. 6 (05/18/2011)
- David M. Geltner, Norman G. Miller, Jim Clayton, Piet Eichholtz
- Publisher: South-Western Educational Pub
- Jack Guttentag
- Publisher: McGraw-Hill Education
- Edition no. 2 (05/28/2010)
Last update on 2019-04-02 / Affiliate links / Images from Amazon Product Advertising API