What Is A Mortgage Broker? Similarities and Differences Between Brokers and Lenders
A mortgage broker is an intermediary between the borrower and the lender to repay the mortgage to the borrower. In other words, instead of contacting a bank or lender directly, you have the option of using the services of a broker who acts as a guide and liaison for your mortgage. Whether your goal is to buy a home or finance it, brokers can help you get a mortgage. According to your needs and wants, the mortgage broker will talk to the lender on your behalf and, according to your needs and wants and will provide you with different products from different lenders.
Brokers act as a link between the lender and the borrower. Brokers provide the borrower with products offered by lenders through extensive market research. The borrower also chooses the option that best suits his needs. Brokers negotiate communication with both parties separately. Therefore, the borrower does not need to deal with any of the lenders. On the other hand, because brokers work primarily with lenders, they can also demand better rates and conditions from lenders. In short, mortgage brokers do the following:
• Brokers have access to multiple lenders.
• Brokers get product information from lenders. They can simultaneously get rates and conditions for different products in several ways.
• Using the services of a broker, you can manage your receiving process from beginning to end
Similarities and differences between brokers and lenders
There are many similarities between the performance of lenders and brokers. But there are also differences between them. This section points out the similarities and differences between brokers and lenders.
Similarities between brokers and lenders
1- Documents related to the financial situation of the borrower
When an applicant refers to a broker, the broker requests information about the applicant’s financial situation. Tax returns, payment documents, assets (savings and current accounts), and employment documents, along with the applicant’s credit score report, are among the most critical information needed by the broker to assess the borrower’s financial circumstances. These are necessary to calculate the borrower’s affordability. Lenders also collect almost the same documents. In this part, there is no difference between a broker and a lender.
2- Purchased property valuation
Both the lender and the broker value the net worth of the property They look at how much the borrower can get if there are other conditions. Once the broker has received all the details, he can determine which product is most suitable for the borrower in this situation. The best mortgage rate and terms allocated to the borrower are determined according to the value to loan ratio.
Meanwhile, the applicant can decide on his own in all cases, and the broker acts only to guide and assist him. If the applicant does his research beforehand, he will ensure that he is not in the wrong direction.
Differences between brokers and lenders
1. Market Search
After receiving the documents, the broker, on behalf of the borrower, starts his work and finds the market best mortgage rates and conditions. The ability to search to compare different products in the market is the main advantage of the broker; because the applicant can simultaneously choose the best among the wide range of products on the market. However, the borrower can only identify the mortgage rate of one lender. But you have to keep in mind that the number of lenders is an influential factor, and the broker has to negotiate with more lenders. In this case, the borrowers must choose the best among the brokers active in the market. In general, the more options a broker has, the more broker output you will have.
2. Mortgage brokers; as your guide
From the beginning to the end of the process, the brokers can explain each lender’s strengths and weaknesses options to the applicants. They can also find the best deals for your needs and goals. For example, if the applicant has bad credit, the broker can provide appropriate solutions.
3. Good choice for first homebuyers
Brokers can be a good choice for first-time homebuyers. If they go to a lender, the lender will only provide information about their products. In this case, applicants’ access to the rates and conditions of other products on the market will be minimal. But from the wide range of products on the market, brokers can help first-time homebuyers to find the best options.
4. Disadvantage of direct referral to the lender
Applying a borrower directly to a high street lender will take a lot of time and energy. But you can access more mortgage products with the help of a broker. Brokers can also provide better conditions for borrowers; because they work with many lenders, and applicants can get the best options depending on their financial situation. So if you are getting a mortgage, using the advice of an expert broker can bring you better results. Underwriting is another step that the broker can do on your behalf and notify you of the result after completing the steps. The broker will also communicate with the lender during the work and ensure that everything is running smoothly. AWS Mortgages advisors at all stages include collecting data, submitting applications, and underwriting with borrowers. Due to their long experience providing consulting services, our advisors have access to many products and provide the necessary guidance for first-time homebuyers. Therefore, by contacting AWS Mortgages advisors, you will spend less time and energy to find products that meet your needs and goals.