You may have heard of a mortgage broker, but have very little idea if what a mortgage agent does or if you will ever need one. Many people think a mortgage dealer is the same as the loan officer at their financial institution, but specializes in mortgages. But that is large a mistake.
A loan officer is an individual working exclusively for one bank or lender, while a broker can be a single person or a company acts as a go-between for a mortgage lender and a buyer by providing them with an avenue to conduct their business.
Almost all states require that a agent have a license, but the licensing standards vary from state to state. Being licensed as a broker in one state, therefore, does not necessarily qualify someone to function in the surrounding ones, and he or she will have to take the steps to become licensed according to their regulations before working as a agency in them.
The Lender's Mortgage Broker
A mortgage agency will be to serve as the marketer for either a buyer or a lender. If hired by the lender, the broker will both market the lender's mortgage services, and research the financial qualifications of potential borrowers. Working as a mortgage dealer may entailing looking into both the credit histories and income streams of those seeking mortgages, and to verify their incomes, collect their financial data, interview them, and physically visit their homes or workplaces.
After collecting all the information and completing the background investigation of a potential borrower, the interest dealer will submit the data to the lender for that he or she is acting and include a recommendation as to the borrower's creditworthiness. The bank or lending institution will assess the agency input, and include it in their final determination of whether or not to offer a mortgage. The recommendation of a mortgage merchant will be a big factor in the lender's final decision.
The Buyer's Mortgage Broker
If you're a prospective home buyer and wondering if hiring a mortgage broker will help you get the best mortgage terms, just be aware that a refinance broker will not really be working for you and in most states is not acting as a fiduciary to protect your financial interests. It's legal, in many states, for a refinance agent to recommend a higher interest loan than the borrower unnecessarily needs to accept, so that the broker can pocket the difference. And if the mortgage agency can persuade the borrowers to accept a penalty for paying their mortgage early, they will get a bonus from the lender.
So as a borrower, your best bet is to work directly with your lenders, shop around, and then use the lowest rate you are quoted as a basis for negotiations.