A mortgage broker refers to an intermediary whose job is to broker mortgage loans for businesses and individuals. Traditionally, the banks and other financial institutions’ were responsible for their own products however owing to stiff competition the institutions are forced to seek broker mortgage services from brokerage firms.
The role of mortgage brokerage firms has become more pronounced in Auckland. Mortgage brokers find banks and other direct lenders that borrowers seek. They are paid by the lenders and in some cases they charge some commission.
People who offer broker mortgage services are highly regulated and in some countries, they must adhere to banking and financial laws.
The nature of activities performed by mortgage brokers varies depending on jurisdiction. Generally, they are responsible for giving the borrows advice on mortgage and the circumstances they may be held liable when they give a defective advise.
First time home buyers will always find it difficult to master the complicated steps in qualifying and applying for a mortgage. In Auckland, such people must rely on broker mortgage services. The brokers work as intermediaries between potential borrowers and the available lenders.
In the modern times, the brokers are responsible for not only qualifying borrowers for new mortgages but are responsible for giving advice and opinion to enable the borrower makes a decision. Such brokers must have a comprehensive understanding of the financial market, interest rates amount of money that can be borrowed and other factors that may affect the mortgage. The broker must be able to ascertain the credit worthiness of the prospective borrower hence must work towards protecting the lenders against risk. They should match the lenders to borrowers with a good financial standing.
The brokers must help the borrower complete the necessary loan lending documents. In some cases, they do all the work for their clients so as to hasten the borrowing process. They share domestic responsibilities and must arrange and disseminate a detail that surrounds a new mortgage.
Although there are cases where the job of the brokers may be limited to that of sales person, when this happens their duty may revolve around linking the borrower to the lenders and may not give advice to the borrowers. In such a case, they collect a commission.
In some cases, the work undertaken by the broker will depend on the depth of the service and liabilities. In most cases, banks use them to find qualifying borrowers and outsource some of the liabilities for foreclosure and fraud. In this case, a mortgage broker works as a conduit between the lender and the buyer. The brokers must be licensed and their activities regulated.
In some countries the mortgage broker must be registered and may be held personally liable for fraud. When they are proved guilty, they could be punished by revocation or by being imprisoned. Generally, they are expected to improve and enhance the mortgage industry. They make money on the loans given out and must have a network of lending institutions to enable them sale more loans.