Mortgage Broker
Author: Terri Ewing
Published: July 25, 2008
Mortgage Broker Defined
A mortgage broker is the middle man between you and a wholesale source that funds your loan. The wholesale source is called a wholesale lender. The mortgage broker brings you and the wholesale lender together.
A mortgage broker’s big claim to fame is the ability to shop your loan to many different wholesale lenders to find you the best deal. They make it sound like they shop your loan to hundreds of lenders but in reality, most mortgage brokers usually have only 3 or 4 lenders they use.
A mortgage broker has to apply for a relationship with a wholesale lender. Some have very stringent requirements and others let almost any broker in. The broker doesn’t always use the lender with the lowest rates. They may not be able to get a good wholesale lender to say yes to them or they may just use the one who is the fastest or easiest to deal with.
All of a mortgage broker’s compensation is disclosed on the closing statement. The wholesale lender wires the funds to the title company and the title company cuts the mortgage broker a check for their services. All the fees like originations fees or mortgage broker fees are paid to the broker along with any yield spread premium.
Click the link to read all of our vistior questions about mortgage brokers.
Author: Terri Ewing
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