Mortgage Brokers

Posted on October 28, 2007
Filed Under Home Loans | 1 Comment


What is a Mortgage Broker? A Mortgage Broker arranges financing for a homeowner from a lender. The Mortgage Broker provides a loan application to the borrower and also provides a GFE or Good Faith Estimate of Closing Costs. The Mortgage Broker than pulls the loan applicants credit and determines the creditworthiness of the borrower. Based upon several factors including credit, loan to value, savings, assets, employment, appraised value and other factors the Mortgage Broker is able to obtain a loan approval from an investor or lender.


The Mortgage Broker earns fees by charging discount points or obtaining a lender paid rebate which is tied to the interest rates. Thus, using this technique a Mortgage Broker can offer a “no point” loan or a “no closing cost” loan. The Mortgage Broker uses the rebate from the lender to pay loan closing cost fees on behalf of the borrower. The No Closing Cost loan is a good option for someone who is considering refinancing their mortgage in the near future or perhaps someone considering moving soon.

Mortgage Brokers can send the loan file to 1 bank or investor or to multiple banks and investors to obtain the best loan pricing for the loan application the mortgage broker is working on. Mortgage Brokers offer hundreds of loan products, interest rates, terms, etc.. so it pays to shop around and get several quotes from several Mortgage Brokers. Mortgage Brokers can even give you several scenarios using several loan programs.


Comments

One Response to “Mortgage Brokers”

  1. Vancouver realtor on October 31st, 2007 4:45 pm

    In Canada very little is set up for home owners to get a break, and it usually only happens if the banks see a rise in interest rates early into your longer term mortgage payment option than they were expecting when you signed it. Occasionally the interest rates go up during your 5 year term that will save you a few dollars but in the end the best way to save on your interest is to pay mortgage payments on a weekly basis. Even 2 payments a month will cut your actual interest payments. That way you are putting more on the principle in a shorter period of time.

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