A mortgage broker’s job is to cut through all the red tape involved in the process of obtaining the loan. Most people are unfamiliar with the many steps involved in buying real estate without paying full price for it. Additionally, most people don’t understand what is considered acceptable loan documentation. This is why you should work with a mortgage broker.
A loan broker must first convene with the borrower’s creditors to identify all possibilities for obtaining the borrower’s financing. Once the possibilities have been exhausted, the loan broker will petition the lenders for a loan commitment. When the loan commitment has been received by the broker, it has been made clear that the individual is qualified for the loan based on available equity.
Next, the loan officer will research the loan package that is wanted. He will then make a determination as to which lender is most likely to accept the loan. In this step, it is prudent for the loan officer to ask for a copy of the appraisal for comparison purposes. An appraisal is an interior and exterior report that is performed by a certified appraiser. This report lists the estimated value of the property and its comparison with the subject property, which must also be listed on the appraisal. If the loan package is going through a broker, then the broker must also perform this appraisal.
The mortgage broker may also have to meet with attorneys to discuss the mortgage contract. Attorneys must also make a determination regarding local law governing the transfer of property. For example, a ” brothers and sisters” (owning) loan means that the first loan holder is identical to the second loan holder. On the other hand, a proprietary (owned by one) loan means that the second loan holder is different from the first loan holder.
In the meantime, while the mortgage broker is busy with the ongoing loan process, the mortgage lender will want a closed loan completion date for the first mortgage lender. This loan completion date is of the first few days of the month when the loan is funded.
Work With A Mortgage Broker
A mortgage broker’s duties are also not limited to providing funding. The mortgage broker may have additional responsibilities to lenders.
With a mortgage broker, the financial institution that wishes to find the individual with the best rates and lowest prices has the advantage of using one who can shop from a wide variety of lenders without regard to which lender gives the lowest coverage and fees.