Mortgage Broker Definition
When a prospective home owner wants to find the best mortgage for his home, income and credit rating, he may seek out a mortgage broker in order to find the precise loan that will work best. The mortgage broker is not affiliated with any one mortgage lender. Instead, the mortgage broker helps borrowers to get a loan from one of the various local or online lenders that may approve a loan for the borrower.
With a wide association with many lenders, a mortgage broker becomes familiar with the terms available from various lenders. The broker can help the borrower to apply for the specific loan that offers the best terms. With a wealth of knowledge of local lenders and their financial products, using a mortgage broker can considerably cut down the time that it takes to find loans and choose the best lender. A broker may also know about special loan terms that a lender may not know to ask about by himself.
A mortgage broker also helps the prospective buyer with loan preparations. This can include helping the borrower to understand the loan terms and to gather all of the appropriate documentation. The mortgage broker acts as a go-between during the loan process, explaining the process to the borrower and letting him know the options available to him. When a loan is approved and the papers are signed, the mortgage broker is no longer involved in the process. The lender then takes over all disclosures and answers all questions.