Every person dreams of owning a home. Having to live in a rental house is not only expensive but also inconveniencing as you are not allowed to make any major developments. The challenge of owning a home still remains because buying house proves to be an expensive venture for many people. However, with mortgages being obtained from a mortgage broker, it is now possible for virtually everybody to own a house without having to strain financially.
In response to the continued increase of people in need of home loans, there are now numerous home loan providers in the market. Usually, loan issuers play an important role as they bridge the gap between borrowers and lenders. They help lenders get clients while at the same time assisting borrowers get ideal lenders depending on their specific needs.
Home loan lenders may either work on a permanent basis for one company or work as a freelancer for various home loan providers. The compensation of intermediaries is usually on commission basis depending on the number of clients that the intermediary has brought to the company.
Many a times, intermediaries are confused for lenders. Brokers are not in the business of lending money. They instead, get borrowers and connect them with home loan providers who then give loans to buyers. Intermediaries are keen to ensure that they match the needs of clients with ideal house loan providers.
Middle men also work with lenders to ensure that all their home ownership products are in the market and that potential home owners are aware of their existence. The middle men are also instrumental in advising potential home owners on the right kind of home loan for them depending on their needs.
Upon introducing a borrower to a lender, it is now the duty of the broker to ensure that the whole transaction is complete. The borrower will fill some forms together with the intermediary. These forms will require information which will seek to establish among other things, the credit status of the client, details of their employer and disclosure of any assets that he may have. All this information is used to evaluate whether a borrower qualifies for the house acquisition loan or not.
Upon the completion of the forms by the borrower, the broker then hands them over to the lender for verification. It is after the verification process that the lender issues the loan and arranges for its disbursement to the borrower.
Prior to the issuance of the home title, the broker always makes the borrower aware of all the information that he or she requires to know. This information includes but is not limited to rates of loans offered by various mortgage providers.
Once the potential home owner has obtained the loan from the mortgage provider, the work that the intermediary has to do is now complete and any further consultations are done directly between the lender and the buyer. The compensation of mortgage intermediaries is in form of commissions which is payable upon the conclusion of the transaction. This money is obtained from the amount that a borrower pays at the end when the transactions are completed. This is referred to as the closing cost.
Article source: http://www.appraisalarticles.com/Real-Estate/3026-Role-Played-by-a-Mortgage-Broker.html