What advantages do mortgage brokers have over their larger banking counterparts?
In a special to Mortgage Professional America, Mat Ishbia of United Wholesale Mortgage lays out some advantages the mortgage channel has over banks.
More loan choices. It’s not only advantageous for borrowers to have access to more loan choices, it’s better for loan originators as well. If you’re an originator at a mega bank or retail lender, you’re limited to that one company’s product mix. If your company doesn’t offer FHA or Jumbo loans, as an example, you’re missing out on potential business. Loan originators at mortgage brokers have access to dozens of lenders’ products. If one place doesn’t offer a product, simply find another one that does.
More money. Mortgage brokers offer loan originators a better compensation plan than most retail organizations. And with faster turn times, loan originators are able to turn over their pipeline faster – which means they make money faster and, since it doesn’t take as much time to close a loan, they can get a quicker start on the next loan.
Shop for the best rates and turn times. More than the actual loan products, other factors that make certain lenders the best choice for specific borrowers include rates and turn times. Each borrower is unique from the standpoint of FICO scores, debt-to-income ratio, savings, and personal preferences, so find the best solution for each. Don’t just try to ram square peg into round holes.
You can obtain a loan from either a Mortgage Broker or a Mortgage Lender. Lender is a financial institution that makes loans available directly to the borrower, were Brokers connect borrowers to lenders were they have the ability to offer competitive rates and loan products. A direct lender offers mortgages, including commercial banks that offer a slew of services and mortgage banks. If you decide to obtain a mortgage though a direct lender instead of a mortgage broker, you will need to apply individually to each lender. This can be a time-consuming and frustrating process. The primary benefit of a mortgage broker is that they can shop with many lenders and get a variety of quotes, rates and loan programs. If you use a direct lender they only have access to their products and rates. A mortgage broker is able to shop a multitude of products and rates, as well as specialty programs such as Bank Statement Program, Unique Investment Programs, Hard Money Loans, Housing Events (Foreclosure, Short sale, Deed in lieu or Bankruptcy). If you don’t want to go though the hassle of contacting various banks, a mortgage broker might be a better option for you.
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