By: Scott Fowler
The answer is simple – to SAVE TIME and MONEY! With tremendous competition in today’s marketplace for your business, mortgage brokers continue to be the preferred provider for home loans. In 2005, mortgage brokers originated over 70% of all residential mortgages. This clearly indicates consumers are choosing superior options, convenience, service and expertise offered by mortgage brokers.
The mortgage broker is an expert mentor who guides the consumer through the complex mortgage lending process. The broker offers the consumer extensive choices and access to affordable home loans while balancing the consumer’s financial interests and goals.
Consumers could conceivably shop around to many financial institutions, but that can be time consuming and very confusing. Most people are either too busy or are overwhelmed by the process. The broker works as a liaison between the borrower and the lender to create a cost effective and efficient loan process. Brokers bring financial institutions to the consumer. The borrower doesn’t have to spend time and energy visiting websites, playing phone tag with multiple loan officers, and trying to compare loan options with different rates, points, closing costs and terminology. The borrower is approved with one application, instead of having to qualify a dozen times by shopping themselves.
Unlike direct lenders, brokers are not limited to one set of loan programs. Individual lenders offer only a fraction of the programs that might be beneficial to the consumer. Mortgage brokers shop the market and direct consumers to lenders who have the loan products that best meet their needs. Brokers deal with multiple lenders ( 40 on average ) and are able to select the lender with the best rates and programs for any given loan scenario. The lender with the lowest on a 30 year fixed loan probably doesn’t have the best rate on a 5/1 Interest Only ARM. A savvy broker provides great flexibility and choice to the borrower.
Interest rates change daily. The lender with the best rate today may not have the best rate two weeks from now. Brokers can cancel a rate lock with a lender and relock with another to capture a lower rate if the market shifts. Sometimes, the best deal may not always equal the lowest rate. A loan with a very low rate may not be the best choice for a consumer with limited cash, if that rate comes with high points and fees. The best deal for any consumer depends on his financial circumstances, needs and goals.
While rates are an important consideration in selecting a lender, brokers also make their professional recommendations based on a lenders reputation for service, their underwriting criteria, their ability to fund a loan on time, and their compliance with the consumer’s requirements. If problems arise in underwriting that cannot be satisfied, the mortgage broker can take the deal to a different lender and get the loan closed on schedule without starting over.
Often, direct lenders have limiting criteria with no ability to be creative to qualify the consumer. Mortgage brokers are responsive and have pioneered the subprime credit market, using innovative loan programs to approve borrowers with less than perfect credit histories. Many would not have been able to enjoy homeownership without the assistance and dedication of a mortgage broker.
In conclusion, consumers demand choice, convenience, and expertise. Mortgage brokers deliver. By continuing to provide individualized attention and sound advice tailored to the borrower’s needs and wants, mortgage brokers can expect increased market share.
About the Author: Scott Fowler is Partner and Mortgage Planner with Horizon Financial, Inc., www.horizonfinancial.org, in Greenville, South Carolina. Scott has over 10 years experience in the mortgage business. You can reach Scott at (877) 527-8911 ext. 104
