Selecting a mortgage company Part 1 of 4 What do mortgage brokers do?

When it comes to choosing a mortgage company that you are going to choose its important to know who you are working with.

A mortgage broker is usually an in-between company that has a contract with other mortgage lenders that agrees to pay them a fixed percentage on any loan that closes through their company.

In this scenario a borrower/client meets with the mortgage broker,  provides documents and the loan originator discusses the programs, rates, fees etc...  for the particular lender that best suits the clients needs. Assuming that the client qualifies, the Loan Originator sends the file to his/her loan processor and the file usually goes to the third party investor in underwrite the loan and condition for items needed for final approval.

Once a final approval is made the Third Party investor and the mortgage broker works with the title company to get necessary documents to the closing table and the Third Party Investor distributes the funds for the closing.

Sounds pretty good, right? Well maybe not. The problem with using a mortgage broker is that you will have a third party doing much of the work on your loan and they will be the one that ultimately determines whether or not you are approved. Often the communication between the loan originator and the third party lender is restricted and things move at a much slower pace.

Its difficult to get answers and the mortgage broker has virtually no control at all of how your process goes once the loan is sent to third party all they way up unto the closing. Broker deals have a higher decline rate and a much longer closing time than some of the other options we will talk about in parts 2-4.

There is a better way. Stay tuned for Part 2 coming soon, and yes I will be saving the best.... part 4 for last.  

All The best!

Shawn

About the Author

Shawn Gerhardson (NMLS #274129) is an active loan officer with Waterstone Mortgage. Email Shawn directly atsgerhardson@waterstonemortgage.com, call at 763-691-0202 or click to get a free, no-obligation rate quote. You can also find Shawn on Twitter @Mortgageg and on Facebook Specialties: Purchase, Refinance, Debt Consolidation, Conventional, USDA Rural Housing, FHA,VA and MHFA Loans. Credit Repair, Relationship Networking, Direct experience with starting a networking group from the ground up.