What Is The Difference Between A Mortgage Broker And Lender?

A mortgage broker and a lender are commonly mistaken as one and the same

. Though they function for the same purpose, which is to facilitate loans for borrowers, the difference lies in the process of doing so.

A mortgage broker, such as a DC mortgage company, offers product loans given or offered by various lenders. On the other hand, the lender is the actual provider of loan to the borrower. Simply put, the mortgage broker acts as a middleman between borrowers and lenders in which the broker may work either with the lenders firm or independent of it.

A mortgage broker works hand-in-hand with borrowers to assist them in finding the appropriate lender for them. A crucial skill for brokers is to be able to identify the needs of borrowers. They therefore have to constantly search for the best deals from lenders. Since mortgage brokers often have a numerous and wide range of connections from various lenders, they are able to recognize specific deals that match the borrowers situation.

Obviously, having a wide range of contacts is advantageous to borrowers who have meticulous needs. A mortgage broker makes it possible to search for a lender that caters to borrowers special needs such as credit problems. After applying for a loan from a specific lender, DC mortgage brokers inform borrowers about lending and interest rates and payment terms. After verifying all documents, which can include employment certificate, credit standing, assets and property appraisals, they are now submitted to lenders for processing.

If the documents are accepted, the lender now approves the loan for disbursement.

There are, however, cases in which mortgage brokers are unable to facilitate the initial loan process because of bad credit standing on the borrowers part. In this case, a broker may act as a guidance counselor to make borrowers understand what needs to be done to improve their bad credit rating and obtain better loan rates. The mortgage broker also offers assistance before the loan is given. But after the loan is given, it is usually up to the lending company to assist the borrower.

Brokers are essential to people who are making their first loaning venture. They not only ease the loan application process but also help clients make informed decisions about their choices. As such, borrowers are not overwhelmed about the technicalities of loan application and approval because they have brokers like DC mortgage companies who can do a layman explanation for them.

by: Darius Degross

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