Mortgage brokers are not licensed mortgage brokers per se but simply people who assist mortgage lenders in finding mortgage applicants who qualify for mortgage financing. They are intermediaries who link to mortgage lenders and mortgage applicants but don’t use their funds to originate loans. A mortgage broker Adelaide may save the borrower time and money during the application procedure and possibly much more over the life of a mortgage loan.
The concept is simple enough: when a mortgage lender approaches a mortgage broker, the broker finds potential borrowers and contacts them. The mortgage broker then brings those applicants to the attention of individual mortgage lenders. At that point, the individual lenders (the “middlemen”) evaluate the mortgage loan application and determine whether to offer finance to the borrower based on the borrower’s credit and income information. Each loan application is individually reviewed, and if financing is offered, it is sometimes directly deposited into the borrowers’ bank account.
The way the entire loan application process works is somewhat complex, and we will discuss it in a bit more detail below. However, the essence of how it all works is this. When a home buyer (you!) applies for mortgage financing at one or more local banks, he/she submits a loan application (which is a written application). Along with the home buyer’s name and address, the application includes credit information that one or more banks have confirmed; the names and addresses of the home buyers’ (borrower) and cosigners; the mortgage lender’s (home buyer’s) or cosigner’s (borrower’s) name and address; and, if applicable, the mortgage lender’s (borrower’s) and cosigner’s credit references.
Once these details have been submitted, the mortgage broker Adelaide (typically a bank) contacts each of the lenders listed above, along with the borrower. At this point, the mortgage brokers’ job is to find the best interest rate for the mortgage loan that best fits the borrower’s budget. In many cases, mortgage brokers find interest rates through their relationship with mortgage lenders. In other cases, the mortgage brokers shop around for the best deal for the borrower. Either way, the mortgage brokers make sure that the best interest rate is provided – and usually at the best value to the borrower!
From here, the mortgage broker then completes a loan application, which is returned to the lender (usually the same lender from whom the borrower received his/her mortgage loan application). The mortgage broker collects all of the relevant data that the lender needs to finalise the appropriate loan amount and terms. The loan application is returned to the appropriate lender with any applicable fees due. When the lender receives the appropriate loan amount, it reviews the loan information and approves accordingly. If the loan is approved, the mortgage broker Adelaide typically completes the final paperwork and submits it to the appropriate lender. The lender then completes the appropriate closing procedures and submits the final paperwork to the lender.
With today’s competitive lending market, borrowers can save thousands of dollars over submitting their mortgage loan application. Using an experienced mortgage broker, the borrower eliminates the need to fill out the paperwork required by most lenders and saves time. Also, borrowers who make their loan applications miss out on many useful programs, discounts, and opportunities that an intermediary will use. Indeed, the modern mortgage broker does much more than filling out application after application, but rather helps complete each loan application so that it is complete and submitted to the appropriate lender.