Differences between Mortgage brokers and lenders
Very often, people confuse a mortgage broker with a mortage lender. so what's the difference?
A mortage broker offers products from lenders, while a lender acutally provides the product and the money for the borrower.
Confusingly, using a Mortage brokers service can be at no extra cost to the buyer, the broker will provide a service to the customer being the liaison between the borrowers and lender. Additionally a broker can offer you various types of product from different lenders whereas a lender will only promote it's own products.
How it works
The broker doesn't loan money. Instead, he or she works with borrowers, assisting them in finding appropriately matched mortgage loans. Typically, a mortgage broker will learn the needs of the borrower and do the work of shopping for the best loan deal from lenders offering that particular type of loan. Brokers usually work with numerous lenders, attempting to match the right lender with each individual client.
Some brokers actually have hundreds of lender contacts and agreements. Because they have so many lenders from which to choose, brokers are more likely to find loans for borrowers with special needs, like problem credit, than individual lenders who can only promote thier own specific product.
Mortgage brokers accept applications from borrowers and seek to lock in rates and terms with lenders. Brokers work with you to gather all necessary documents, including, but not limited to, credit reports, employment verifications, asset disclosures, and property appraisals. Once an application file is deemed complete, the mortgage broker submits it to the appropriate lender, who then handles loan approval, deeds, and disbursement.
Frequently, a mortgage broker will provide basic credit counseling in their approach to assist borrowers with correcting credit issues. He or she may also advise borrowers on ways to obtain better loan rates. Brokers answer questions and assist borrowers in understanding both the application process and loan details as well. They only offer assistance before the loan process is complete. Once the borrower has obtained a mortgage, the broker has effectively finished their task and you have a contractural agreement with the lender.
Worried about extra cost?
Brokers earn commissions in exchange for bringing borrowers and lenders together. The amount of the loan is normally exactly the same as if you went the to the lender direct. The lender pays the broker for obtaining a sale which they would have not normally obtained without direct expense such as radio, tv advertising or other methods.
Careers in the mortgage industry
Are you looking for employment in a role as mortgage broker, administration, accounts, credit or loan sales? View our Finance vacancies with leading recruiters and employers in New Zealand and Australia.