Mortgage Broker
A mortgage broker does not make mortgage loans, but finds qualified people who need mortgage loans and refers them to mortgage lenders. The lenders pay the mortgage broker a commission for each mortgage loan generated from mortgage broker leads.
Lenders don’t pay a mortgage broker for just any person who walks through the door. They want qualified leads – people whose credit is sound and whose proof that they are able to repay the mortgage loan they are seeking is all in order. So a mortgage loan broker spends a good deal of time getting mortgage loan applicants’ paperwork in order and asking them a lot of personal questions. Sometimes, the mortgage broker even provides the correct answers.
Mortgage brokers do not get paid unless mortgage loans are made, so they face the temptation of making loan applicants look better qualified than they really are. Beware of any mortgage broker who tells you to pad your income. Doing so may get you the mortgage loan and the broker his commission. But you are the one who will be obliged to repay what you are unable to repay, or lose your home.
Read every line of all paperwork a mortgage broker prepares for you very carefully, and correct any inaccuracies before signing anything. It is not unheard-of for a desperately hungry mortgage broker to falsify income and credit information without even telling the applicant. False information on a mortgage loan application can give the lender grounds to revoke your loan, if it is discovered later.
A mortgage broker Web site is often a good place to learn the basics of mortgages; calculate your eligibility and how much money you can afford to borrow; and make contact with one or more mortgage brokers who can help you secure a mortgage loan.
Commercial mortgage brokers specialize in matching business borrowers with commercial mortgage loans. Commercial mortgage loans are very different from consumer mortgages. The former require careful, detailed assessment of a business venture’s revenue-generating prospects upon which the amount that can be borrowed is based.
A reverse mortgage broker specializes in reverse mortgages, in which one receives an annuity derived from the equity in one’s home. Calculating the long term equity and structuring the monthly payout is of critical concern in reverse mortgages.
Mortgage brokers perform valuable matching services between buyers and lenders. However, it’s important to be aware that a mortgage broker’s primary interest is his income, not your needs.