A mortgage broker is an individual who purchases a mortgage at wholesale interest and then resells it to the end-user, i.e. the customer who applied for the mortgage. Large financial institutions and individual homeowners utilize the services of a mortgage broker Adelaide to buy mortgage loans on behalf of the customers. This role has become highly important as the number of financial institutions has increased over the years. The mortgage market now encompasses many areas and submarkets.
The primary role of the mortgage broker is to find a loan that best suits the client. S/he first communicates with the potential client and goes through a detailed analysis to find out what the client needs and what type of loan fits the needs best. After finding the right loan, the broker contacts the appropriate lender on behalf of the client. Usually, brokers receive multiple applications and then review the details, make a recommendation and either contact the lender or the bank on behalf of the customer. The mortgage broker Adelaide helps the client to compare loans and chooses the one that best fits the client’s needs and situation.
There are several types of mortgage brokers. Firms that deal with only one type of lender are called commercial mortgage brokers. Lenders that do not specialize in just one type of lender are called government mortgage brokers. Government brokers may work with subprime lenders and some high-quality banks. Private mortgage brokers may work for themselves and only deal with specific lenders.
Many mortgage brokerage companies operate as independent agents and do not have ties to any specific lenders. Independent mortgage brokers typically will make their own referral connections, i.e. refer borrowers to lenders that they think might be good for them and only handle transactions with those lenders.
Mortgage brokers may also conduct underwriting for mortgage companies, but the underwriters are typically independent and may not have a relationship with anyone particular lender. This means that the broker should present information to lenders based on their underwriting guidelines and not based on recommendations from any lender directly or indirectly.
To get into the process of refinancing or shopping for mortgage loans, it is helpful to understand how the process actually works. When looking for lenders to work with during the refinancing or underwriting process, mortgage brokers need to understand the basics of the mortgage process so they can help their clients make informed decisions.
The most important thing for a mortgage broker Adelaide to know is the terminology used by lenders. It helps to learn about all of the different terms because it can make it much easier to navigate the loan application process. The term “origination loan” refers to a specific type of loan that a lender provides to a client for him or her to purchase a house. Sometimes this loan will be referred to as a “force mortgage” because it is actually a “sale.” The term “pre-qualification letter” refers to a letter that a borrower must send out to various lenders seeking information about the homeowner’s credit and financial history.