Archive for the ‘mortgage bankers association’ tag
Mortgage Bankers
Broker Vs. Banker
If you've ever financed the purchase of a home or refinance such a loan, chances are that you used care of a mortgage banker or mortgage broker.
What is the difference, you ask? Great question! A mortgage broker is approved with various direct lenders to broker loans to that lender and earns a fee for it (usually from the consumer and / or the lender). A mortgage broker does not actually borrow any money they simply arrange financing.
A mortgage banker also arranges financing, but a mortgage banker actually use their credit facility (usually a warehouse line of credit) to fund your loan and then sell it as a closed loans in the secondary market to the highest bidder for the loan type and criteria. In many cases, the loans' end buyer already chosen before the loan has funded, limiting the risk … a little.
In theory, a mortgage banker usually has access to slightly better prices because they are eliminating the middle man to some degree, but that has changed in the current market. Right now, mortgage brokers generally have access to the same prices, the Mortgage Bankers can offer. A 30 year fixed rate mortgage quote is usually a good way to compare prices between brokers and bankers.
So what does all this mean for you? This means that you can get as good of an agreement and in some cases perhaps a better deal from a mortgage broker, as you can with a direct lender. A direct lender may be very limited in their own mix of loan product or qualifying guidelines, but a broker usually will have access to several lenders programs and guidelines that will give you great chance of approval at the best prices.
In the latest mortgage industry meltdown, the media have chosen to represent mortgage brokers as scum of the earth and the source of the collapse. The mortgage broker community does not bear some responsibility. But mortgage brokers do not create loan programs and / or guidelines, they are simply to deliver them to borrowers who want them. There were plenty of brokers in the company who sat presumed naïve consumers into loan programs that were too aggressive without proper disclose all the loan details. Fortunately, most of these brokers left the company, and anyone left in the company is expected to be experienced and accustomed to weathering these period storms.
The key to determining who you work with is primarily a function of properly evaluating your mortgage professional experience, intellect and integrity. As in any service, personal referrals are usually best. Besides, just follow your gut instinct and do not be afraid to ask questions. If you get unacceptable answer, then you probably have to move to another professional.
About the Author
Mr. Ferguson has developed an expertise in the financial services sector through education and experience. He completed his degrees in Finance and Business Law at California State University, Long Beach. Mr. Ferguson has spent time in the sales divisions of Fortune 500 mortgage banking and insurance firms. His broad knowledge and concise understanding of consumers is critical to making Free Home Refi the premier provider for consumer Mortgages.