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Basically, wholesale lenders use mortgage brokers as their
loan officers. They offer a lower rate to the broker,
the broker adds on his compensation, and the rate is usually
about the same as you would get using a mortgage banker. Sometimes
the rate is lower, sometimes higher, depending on how much
compensation the broker adds on.
Mortgage brokers also learn the "hot points" of
various wholesale lenders and can handpick the lender for
a borrower which may be unique in some way. He will
be able to submit your loan to either a portfolio lender
or a mortgage banker. Another advantage is that, if
a loan gets declined for some reason, they can simply repackage
the loan and submit it to another wholesale lender.
One additional advantage is that mortgage brokers tend to
attract a high number of the most qualified loan officers. This
is not universal, because mortgage brokers also serve as
the training ground for those just entering the business. If
you have a new loan officer and there is something unique
about you or the property you are buying, there could be
a problem on the horizon that an experienced loan officer
would have anticipated.
A disadvantage is that mortgage brokers sometimes attract
the greediest loan officers, too. They may charge you
more on your loan which would then nullify the ability of
the mortgage broker being able to "shop" for the
lowest rate.
Borrowers cannot get access to the wholesale divisions of
mortgage bankers and portfolio lenders without going through
a broker.
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copyright 2000 by Terry Light and
RealEstate ABC
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