Welcome to our Mortgage Refinance and Refinancing Mortgage Broker Page.
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Welcome to our Mortgage Refinance and Refinancing Mortgage Broker Page. |
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List of some Local Mortgage broker Websites |
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Article QNA Mortgage Broker Info 6|10|04 |
Q. What is a Mortgage Broker?A mortgage broker/brokerage commonly is a company (may be a company with only one principle) which coordinates the mortgage/Home Loan lending transaction between the borrowers and the lending institution. This does not mean that they are just a "MIDDLE MAN". Sometimes that can occur and the same things ring true when the "middle man" is involved. E.G. they are just there to trump up the fees and try to make a buck in the middle. This ,however, is not the norm and mortgage brokers play a crucial role in the home loan process.
Many large and small lending institution, in fact, do not place a large amount of resources on originating loans. They rely on mortgage brokers who tend to be more localized across the country to do the originating for them. Imagine how large institution act. They are interested in the bottom line and often it is cheaper for them to allow smaller local brokerages to employ loan officers . It may not be cost effective for them to open, run and manage national offices. The lending institutions make their money off of servicing the loans. They spend time and resources securing the capital to lend from the market place. Have personnel manage the current accounts to ensure the payments are made properly. Then they basically out sources the services of finding borrowers to brokerages. Brokers do get paid for the service they render. Could you get a better rate on a mortgage if you went directly to the lending institution. MAYBE, but usually the lending companies give a YIELD SPREAD PREMIUM to the mortgage broker for originating the loan. The premium can be determined by what interest rate the borrower receives from the broker .The rates they offer to the broker vary and the broker sells to the borrower based on the amount of money they want from the lender. If they do the loan and make a very small YIELD SPREAD PREMIUM (ysp) the rate may be below the market average. If the broker gives a higher rate then the lender pays them more.
More often the broker charges the fees for the service up front and tries to give the best rate by receiving minimal YSP. It is usually necessary to do so in order to remain competitive in the market place. Since they are making very little from the YSP they may charges fees. The Mortgage Broker can charge points also called origination,discount points, Loan origination, Brokers fees. Relying on a Mortgage Broker to secure a loan for you can be a great move. Just make sure that you do not pay an application fee. The only up front (OUT OF POCKET) funds should be for the appraisal and credit report. These two are services provided by third parties and must be paid once services are rendered. However, any other fee should be not required up front. If the mortgage broker is doing a refinance mortgage for you, you have three full days to cancel the entire loan after the closing company does settlement. Most Purchase loans are complete once settlement paper are signed. Apply for Mortgage or Refinance Mortgage Quotes Online
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