A common enough profession, many people are still unaware of what exactly mortgage brokers do. This makes a certain amount of sense, given that home loans are not something the average person is an expert on. The simplistic explanation is that a broker facilitates deals and 'mortgage' refers to a property loan, thus, a broker is someone who facilitates home (or property) loans.
Unlike a loan officer, who fulfills many of the same duties but works for the lending agency, a broker typically works for an outside company. Individuals or businesses hire them to help with paperwork, to explain legal requirements and more, but mostly to find the best loan for that person or business's needs. While a broker is not necessarily a required part of the loan proceedings, they can take a lot of the work and uncertainty off the buyers' shoulders.
Most states and countries require that anyone calling themselves a broker be licensed. And becoming a broker is not necessarily something to take lightly - in some cases, fraud committed on a loan can be the broker's responsibility for the entire lifetime of the loan. However, more commonly, buyers are taken advantage of by a broker, because not all states or countries have laws or regulations requiring these professionals to keep the buyer's best interests in mind.
There are limits in place which attempt to keep unscrupulous people from taking advantage of those who know nothing about the process. If fees go over a certain level, the loan may be marked as a 'high-interest' loan and is subject to certain other requirements. This regulates fees and helps protect consumers from being taken advantage of.
The fee for the broker's time and effort may be paid by the lender or the buyer, depending on the country and area in which the loan is being taken out. The actual loan amount may be influenced by the rate the broker charges, or it may not. In certain countries, the broker may receive a variable commission without it affecting the actual loan amount. In others, the loan rate will be influenced by the broker's fees, or the commission may be fixed by law.
A broker is often paid by commission, and this means that the profession is competitive and requires a fair amount of sales skills. While knowledge of the laws and regulations regarding these loans is definitely a must-have, a certain ability to sell him or herself and their profession is needed in order to make it in the business. This is especially critical for those who don't work for large brokerage companies, but instead, run their own.
Although the terms may be used interchangeably, a loan officer, broker, and banker are three different titles. Technically, a broker may refer to him or herself as a loan officer, but this title is usually reserved for the professionals who work for lenders, not as go-betweens. While all three may do the same job, they are bound by different regulations and are capable of making different deals.
Getting help from someone who knows what they're doing is a good idea, especially when making as big an investment as a home loan. There's no shame in not knowing much about the home loan process, since most people have little reason to. Employing mortgage brokers who do know what they're doing, though, can make the whole process go a lot more smoothly.
Unlike a loan officer, who fulfills many of the same duties but works for the lending agency, a broker typically works for an outside company. Individuals or businesses hire them to help with paperwork, to explain legal requirements and more, but mostly to find the best loan for that person or business's needs. While a broker is not necessarily a required part of the loan proceedings, they can take a lot of the work and uncertainty off the buyers' shoulders.
Most states and countries require that anyone calling themselves a broker be licensed. And becoming a broker is not necessarily something to take lightly - in some cases, fraud committed on a loan can be the broker's responsibility for the entire lifetime of the loan. However, more commonly, buyers are taken advantage of by a broker, because not all states or countries have laws or regulations requiring these professionals to keep the buyer's best interests in mind.
There are limits in place which attempt to keep unscrupulous people from taking advantage of those who know nothing about the process. If fees go over a certain level, the loan may be marked as a 'high-interest' loan and is subject to certain other requirements. This regulates fees and helps protect consumers from being taken advantage of.
The fee for the broker's time and effort may be paid by the lender or the buyer, depending on the country and area in which the loan is being taken out. The actual loan amount may be influenced by the rate the broker charges, or it may not. In certain countries, the broker may receive a variable commission without it affecting the actual loan amount. In others, the loan rate will be influenced by the broker's fees, or the commission may be fixed by law.
A broker is often paid by commission, and this means that the profession is competitive and requires a fair amount of sales skills. While knowledge of the laws and regulations regarding these loans is definitely a must-have, a certain ability to sell him or herself and their profession is needed in order to make it in the business. This is especially critical for those who don't work for large brokerage companies, but instead, run their own.
Although the terms may be used interchangeably, a loan officer, broker, and banker are three different titles. Technically, a broker may refer to him or herself as a loan officer, but this title is usually reserved for the professionals who work for lenders, not as go-betweens. While all three may do the same job, they are bound by different regulations and are capable of making different deals.
Getting help from someone who knows what they're doing is a good idea, especially when making as big an investment as a home loan. There's no shame in not knowing much about the home loan process, since most people have little reason to. Employing mortgage brokers who do know what they're doing, though, can make the whole process go a lot more smoothly.
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