Facts and Myths About Mortgage Brokers
There are many myths about mortgage brokers all across the internet. In this article, you will learn about the top three myths and why they are false.
No Control of Underwriting Process
One of the largest myths about mortgage brokers is that they have no control over what happens during the underwriting process. There are many retail lenders and banks that claim this myth because they want to promote their own employees that can underwrite the files. But the truth is that the mortgage brokers works directly with the investor so that they can underwrite the file.
Many retailers will say that they can go directly to the underwriter, but many retail underwriters are cautions because they are supposed to underwrite to the final investor’s standards and then sell the mortgage to them after the closing process.
The mortgage brokers get to choose on which bank and end investor that they want to spend the loan on. If the bank or end investor does a bad job by not clearing the loan fast, then the broker can choose to no longer do business with them. This makes the underwriter take responsibility and accountability on clearing their conditions.
Brokers Take Longer Than A Retailer Or Bank
The second most popular myth is that the mortgage broker takes a longer time that the bank or retail lender. The truth about this is that banks and lenders take up to 45 days to close a mortgage. While a mortgage broker can only take up to 21 days for a closing, which is half of the days that a bank or lender takes. It is very uncommon for a mortgage broker to take more than 30 days in order to close a loan.
Many brokers work more quickly because the only thing that they do is mortgage loans. While banks and lenders have to do other services such as auto loans, credit cards, and checking accounts, which are nothing but distractions for closing mortgages more quickly.
Mortgage Broker Are More Expensive
The last large myth that you may here is that mortgage brokers are more expensive but this is not true at all. For all the loans that are closed by mortgage brokers, there aren’t any origination fees. This also means that there are no underwriting fee and processing fees. But many banks and lenders could make you pay thousands of dollars that will add to the cost of you buying your home.
In reality, mortgage brokers have access to the lowest rates in the mortgage industry. The broker will receive the wholesale rate from the end investors and this results in lower costs and lower than average rates.
In the end, there are many bad rumors about mortgage brokers but could be far from the truth. It’s important that you research and speak with a mortgage broker versus listening to someone with bad information.
You should use a mortgage broker, because you can get lower rates than a retail lender or bank and you can save thousands of dollars. Here at Saint Charles Mortgage, we strive to help our customers. Want to know more? Check out our staff page here!