1.6- What is a Mortgage Broker ?

A Mortgage Broker is an Individual or a firm that brings borrowers and lenders together for loan origination. A Mortgage broker typically takes loan applications and may process loans. A Mortgage broker can sometimes close the loan, but they typically turn it over to the underwriting and closing. A Mortgage Broker does not work for a specific bank or a lender but work with several lending Institutions.

A Mortgage Broker is a middle-man in the lending situation. If a borrower chooses to work with a broker, that broker will take their application and then shop it around to different lenders that they have a relationship with to find the best lender for the borrower's specific needs and application. The lender then compensates the broker for providing application to them. The Mortgage broker does not fund loans, they only take the application and in some situations, they help to process and close the loan. The Lender is the one funding and underwriting the application. Even though a broker is a middle man, it does not mean that a lender has better rates than brokers. A brokerage has the ability to negotiate the rates with multiple lenders they use.