All About Being A Mortgage Broker
It used to be that you went to your local banker for a loan on your property or to secure money to buy a new house. Now you can work with a mortgage broker who has access to many different lenders who can offer just the right loan to fit your needs. The mortgage broker works as an intermediary between you and your lender and they charge a percentage of the loan amount for servicing your loan. Mortgage brokers are the biggest sellers of mortgage products for lenders.
It is the job of the broker to assess a borrowers circumstances including running a credit report, verifying income and assessing the market to find a product that fits the clients needs. They may also get pre-approval for the client in the case of a home purchase. The broker will have to gather all needed documents including pay stubs and bank statements, have the client complete an application form, explain legal disclosures, submit the package to a lender and offer the best loan for their client.
There are moral, legal and professional responsibilities and liabilities that are set in place to provide full disclosure protecting both the lender and the consumer from fraud. The broker is registered in the state he resides in and is personally liable for fraud for the life of the loan. Sixty-eight percent of all residential loans in the U. S. Originate from brokers.
The difference between a banker and a broker is that the banker can use a short term line of credit known as a warehouse line to fund a loan until they can sell it to the secondary market. They repay the warehouse lender and make a profit on that sale. The borrower receives a letter that their loan has been sold or transferred. Bankers sell most of their loans.
When working with a broker the yield spread premium must be disclosed. This is shown on the Good Faith Estimate and allows the customer to compare fees that are being charged. This form is required by the government because some brokers were guilty of unethical practices in switching loans right before documents were drawn.
Basically, to be successful as a mortgage broker you should know the industry. Get to know the real estate agents in your area for leads and get to know the local market. Read banking trade magazines, business periodicals and real estate journals. Learn the loan and funding processes for the different types of loans that are available for your clients. The more connected you are and the more knowledgeable you are the more successful you will be.
You must be a people person and be good at relationship building as you will work with the same companies over and over like escrow agents, appraisers and lenders. You will need to be a salesperson as you are selling lending products. Discipline is key as you are your own boss. Make sure you understand the requirements of being an agent in the place that you live and take the necessary tests and courses you need.
Know the mortgage laws in your state. If you like working with others in an office consider contacting the local mortgage lenders in your area to join a firm. Sometimes working in an office allows you to bounce ideas off of others and develop a social network of peers.
A career as mortgage agent can be very rewarding. If you have a good head for numbers, consider enrolling in mortgage broker courses.