With the purchase of a home, finding the right financing can be one of the most critical decisions. Two common professionals homebuyers meet during their search are mortgage consultants and mortgage brokers. Although these two words are occasionally used interchangeably, they are not quite synonymous. The distinction between a mortgage consultant or broker can be confusing but learning about the differences will aid you in making the right decision and finding the professional best suited for your needs.
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Getting To Grips With A Mortgage Adviser
Mortgage Consultant A mortgage consultant is an expert who coordinates with clients to help them get the best possible mortgage deal according to their financial needs. They usually represent a single financial institution like a bank, and sell products from that institution. They’re there to make sense of a client’s finances, explain various types of mortgages and recommend the best product that their company can provide.
Lenders know the criteria and the going rates and will be familiar with the documentation it takes to get a loan approved. They take a personal approach, walking you through the entire process from pre-approval to closing.
What Does A Mortgage Broker Do?
Assignment editor, a position in a newsroom Mortgage broker – has a fiduciary duty or acts in the best interest of their client. While a mortgage consultant may only work with one bank or lender, a broker has connections to multiple lending institutions. This helps them to compare various mortgages and offer different choices to their customers.
Brokers originate very little new loans themselves \(0.1-4%); they simply match borrowers with lenders who have risk profiles similar to the reciprocal position in the option market. Their big strength is shopping around to find competitive rates-something that can be particularly useful for buyers with unconventional credit profiles or anything less than a stellar credit score.
Key Differences in Representation
Another key distinction between a mortgage consultant and a broker is to whom they owe loyalty. A consultant is an agent of one lender only, not a broker of lenders generally. That’s because their advice is constrained to what their employer has available.
A broker, however, acts on behalf of the borrower and shop around for mortgage solutions from various lenders. A broader network can often mean more competitive rates and a wider range of loan options.
Differences in Compensation
They differ also in their means of remuneration. Mortgage recruiters usually work for a bank or financial institution and are salaried. Their salary isn’t linked to the mortgage product the client then takes out.
They are traditionally paid by the lender with a payment from commission generated by the mortgage. This model creates an incentive for brokers to locate the best possible deal for their clients, although borrowers should still ensure that they agree with the broker’s recommendations.
Level of Choice and Flexibility
Since they are not held to a single lender, mortgage brokers can typically offer more loan options. That can be a plus for borrowers who don’t fit the stringent lending criteria of one institution, but who might qualify with another.
Mortgage consultants could provide insight to their products from the inside and would be able to push your file a bit faster since they are under the same bank.
Choosing the Right Professional
Whether a homebuyer should go to a mortgage consultant or broker will depend on what they prioritize. A loan officer will likely be the right person to speak to if they are looking for that one-on-one relationship with one institution and do not mind the types of loans offered there.
If they’d like to compare several options from different lenders and shop around for the best rate, however, a mortgage broker might be better suited.
Conclusion
Mortgage consultants and brokers both provide valuable services that assist their clients in obtaining financing, but who they represent and what products they have access to vary. A mortgage consultant works with a specific lender and has specialized knowledge about that bank’s mortgage products, while a broker analyzes the market in search of the best loan at the best rate among multiple lenders.
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