Your Mortgage Broker – It’s About More Than Just Rates
Most people wonder why they’re not just approved for their loan since the lending institutions have so much money.
The process of mortgage origination begins when a potential borrower applies for a mortgage from the lending organization. An underwriter then looks through the application and judges it based on the guidelines of that organization’s process for origination.
Senior mortgage brokers provide advanced underwriting for mortgage applications in order to decrease the workloads of the already busy underwriters at lending institutions. These underwriters are under pressure to process a certain quota of applications each day and they must be mortgage applications which will provide good income to the lender. If a broker simply speeds applications out to several different lenders then the process of acceptance can be dragged out at length.
Processing the application is the step that takes the most time in attaining a residential mortgage. Before the early 90’s is wasn’t unusual for processing to stretch to 3 weeks or even 45 days.
Both consumer demand and communications technology have helped to reduce the time it takes to process a mortgage application. Customers will no longer sit and wait for ages until their applications are decided upon and competition in the mortgage market has forced lenders to dramatically speed up their processing. These days lenders can usually give a mortgage commitment in only one day that will be honoured if the conditions are met.
The approach to processing has also changed. Different loan programs dictate how lenders will process applications, rather than just following a single, universal procedure. Documentation required for processing has also changed and sped up significantly in the past 10 years. Products like “No Frills Mortgages” have evolved from the move to process specific products to fulfill customer demands.
Mortgage brokering has allowed lending organizations to make their processes more efficient. Brokers help lenders to sell their products that match their clients’ needs well, and also prepare all the necessary documents needed for an application to be processed quickly by the lender.
In addition to helping with processing, mortgage brokers also help to explain all of the limits and features of mortgage products to borrowers. A broker has to find the best products for their client’s needs and then help to prepare and pre-process their application for the loan, so they work to help both borrowers and lenders.
It’s the client who comes out on top since they get all this help from a broker who typically does not charge a fee to the borrower but to the lender instead. Brokers act as advisors and mortgage lenders compete for broker’s clients. Therefore the lending institutions will also work hard to ensure that brokers are highly educated about the products that they offer.
