Mortgage Broker
Mortgage Broker
Mortgage Broker is defined as a person who acts as an emissary who surrogates mortgage loans in place of individuals or businesses. With the increasing demand for mortgages to clear off previous debts, the role of mortgage broker has become very popular. Today, in most developed countries, mortgage brokers have become an unchallenged distribution source of mortgage products for the lenders. A certain amount of regulation is imposed on the mortgage brokers to ensure a level of protection for the consumer. It is the judiciary of the country which decides the regulations.
In today’s competitive market, lenders are bringing out a vast bunch of rate offers and incentives to attract customers. Plus mortgage purchases unlike grocery purchases are once in a lifetime activities. Many times the consumer gets confused and ends up making the wrong decision. This is where a mortgage broker steps in. He is the one who gives financial advice to his customers and makes them choose the best deal. Speaking more clearly, a broker is the one who does not close in his name. Also he the one who has to uncover his yield spread premium. A broker can be most useful for people with poor credit limits. In such situations finding a lender becomes difficult and a broker is the one who can help this borrower.
The tasks of mortgage borrowers vary with jurisdiction. For example, in the UK, it is the broker who is responsible for giving advice to the borrowers according to the circumstances present before him. And it is the broker who is financially held liable in case the advice given is found to be defective. In some other jurisdictions, a broker’s job is only to show the address of various lenders and not to provide any legal advice.
Some of the common jobs of brokers are attracting clients through marketing, assessing the borrowers’ circumstances, finding a proper mortgage which suits their clients, talking with the lenders in principle, collecting all the required documents, explaining all the legal clauses to the borrowers and submission of all the materials to the lender. Thus the job of a broker has a wide scope and a large number of duties.
But there is a difference between a mortgage broker and a loan officer. A market broker acts as a link between the customer and the lender. On the other hand, a loan officer works directly for the lender. A mortgage broker is registered with the state and he is personally held responsible by the law for giving any defective advice. While, a loan officer conducts his activities under the cover license of his current company.
Thus, we see that in this financially driven market, a mortgage broker has a big influence on the mortgage decisions of every individual. A good advice from the broker can pull out the borrower from any financial trouble while a bad one might make him fall deeper into the trench. So, a broker should be very well aware about the happenings in the market and should develop a knack of taking the right decisions at the right time.
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Category: Mortgage broker
