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Mortgage Finance > Mortgage > Mortgage Broker
Mortgage Broker
A mortgage broker acts as an intermediary who sources mortgages on behalf of individuals or businesses. In competitive mortgage markets many lenders use an array of rate offers and other incentives to attract customers.
To many consumers due to their infrequent purchases of mortgage products the mortgage market may appear confusing and somewhat daunting. A mortgage broker can guide them through the process of selecting a suitable mortgage and offer mortgage and property related financial advice.
For borrowers with poor credit records or other unusual circumstances finding a lender may be difficult and therefore it may be necessary for them to consult a mortgage broker as they will have the specialized knowledge required.
Traditionally, banks and other lending institutions have distributed their own products. However as markets for mortgages have become more competitive the role of the mortgage broker has become more popular. Today in most developed mortgage markets mortgage brokers are the largest distributors of mortgage products for lenders.
Most mortgage brokers are regulated to some degree to ensure a level of consumer protection. The extent of the regulation depends on the jurisdiction. A mortgage broker is normally registered with the state, and personally liable (punishable by revocation or prison) for fraud for the life of a loan.
The nature and scope of a mortgage brokers activities varies with jurisdiction. Typically the following tasks are undertaken:
- Marketing to attract clients
- Assessment of the borrowers circumstances. This may include assessment of credit history, affordability (verified by documentation or otherwise).
- Assessing the market to find a mortgage product that fits the clients needs.
- Applying for a lenders agreement in principle (pre-approval)
- Gathering all needed documents (paystubs/payslips, bank statements, etc.),
- Completing a lender application form.
- Explaining the legal disclosures.
- Submitting all material to the lender.
Additional Links:
Loan Officer
Underwriter
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