Frequently
Asked Questions:
Why should I choose a mortgage broker?
Studies
show over 50% of Americans use mortgage brokers
for financing. Brokers provide consumers with
choice, convenience and experience. The
consumer receives an expert mentor through the
complex mortgage lending process. The broker offers
the consumer extensive choices and access to affordable
home loans while balancing the consumer's financial
interests and goals.
Have more Americans been able to buy homes because
of mortgage brokers?
Yes! Mortgage brokers have been pioneers,
using innovative loan packages to allow low to moderate income
borrowers, with less than perfect credit histories, to start enjoying
the benefits of home-ownership.
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Does the mortgage broker really care about the quality
of the loan itself?
Yes, absolutely. The safety and soundness
of the mortgage lending community is directly linked to the success
and integrity of its home loan originations. Furthermore, mortgage brokers
represent the single largest residential origination source today, emphasizing
that they play a significant role in the mortgage loan process. These
numbers highlight the fact that consumers who exercise their choice
choose mortgage brokers, most likely because brokers are dedicated to
their customers: consumers, wholesale lenders and ultimately, American
tax-payers.
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Do
brokers work for the lender they are selling my
loan to or me, the consumer?
Neither.
As an independent contractor, the broker allows
wholesaler lenders to cut origination costs
by providing such services as preparing the
borrower's loan package, loan application, funding
process, and counseling the borrower. Brokers
help keep loan rates low due to their minimal
overhead and setup costs. Furthermore, the broker
will seek the loan which best suits the borrower's
financial circumstances, needs, and goals. From
the consumer perspective, with rare exception,
the broker does not get paid unless and until
the loan closes. Thus, the broker has the ultimate
incentive to provide the best possible customer
service to the consumer.
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Isn't the broker supposed to get the best deal for the consumer?
Since
mortgage brokers offer the products of many
wholesale lenders they often have the best selection.
This question presumes that anyone can know
what is "the best deal". While many would consider
"the best deal" to mean "the lowest rate," a
loan program with a very low interest rate may
not be the best choice for a consumer with limited
cash, if that rate comes with high points and
fees. A 15-year loan may save a borrower tens
of thousands of dollars in interest payments
over a 30-year loan, but the higher monthly
payments may not be acceptable to the consumer.
So, "the best deal" for any consumer depends
on his or her individual circumstances, needs,
and goals.
Today, over half the nation's mortgages
are originated by mortgage brokers. This clearly indicates that consumers
are choosing the superior options, service, and expertise offered by
mortgage brokers. Brokers have forced retail lenders to compete with
other loan sources, driving down costs nationwide.
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Don't
brokers "steer" consumers to the lenders who pay
the highest fees to the broker?
While isolated instances of adverse steering
can occur, the mortgage brokerage industry has predominantly armed
consumers with a free-market economy weapon: open and vigorous competition.
Any consumer exercising his or her basic right to shop and compare
will ultimately find the loan options that are in his best interests.
The combination of government-mandated disclosures and vigorous competition
has presented today's consumer with unprecedented levels of choice.
While price is an important consideration in advocating a specific
wholesale lender, brokers also make their professional recommendations
based on a number of other factors, which include the lender's:
1)..reputation
for service
2)..underwriting
criteria
3)..ability to
close the loan on time
4)..compliance
with consumer's requirements
If you have any further questions that
have not been answered on this page, please do not hesitate to contact
us.
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