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Mortgage Broker Advantages

Benefits of broker model touted

Aug. 28, 2013

By Mortgage Daily staff

Mortgage brokers are touting five reasons why they can do a better job helping prospective borrowers than bankers.

The No. 1 reason is their industry relationships. While there are a limited number of banks, brokers claim they are the better choice because a reputable broker can have connections with many different lenders.

In addition, effective brokers get special rates from wholesale lenders as a result of the volume of business they generate.

As a result, they can secure better interest rates than consumer can do on their own, according to the National Association of Mortgage Brokers -- which issued the five bullet points in a statement.

"They may also have special access to programs at wholesale pricing that individual borrowers would not receive," the statement said.

NAMB claims that brokers can also save time since they have regular interactions with a wide variety of industry contacts. Loan prospects save time when brokers help them navigate the terms of each lender -- steering them away from lenders with confusing payment terms buried in their contracts.

The third reason that the mortgage broker option is reportedly superior is transparent fees compared to their mortgage banking counterparts.

"This is a huge discrepancy between brokers and the banks," NAMB President Don Frommeyer said in the announcement. "While a broker will provide a full itinerary of the fees, banks are not required to provide that same information."

No. 4 is the additional program options available through brokers, who are experienced shoppers that can secure the lowest rate and best loan terms from a variety of available wholesale programs.

The final reason that brokers are better, according to NAMB, is that they will work harder to get a deal done.

"Brokers look to build a relationship with their clients and offer assistance where it is needed," Frommeyer concluded. "Whether it is helping with basic understanding of credit or acting as a helping hand throughout the entire mortgage process, brokers tend to be more helpful than the banks."

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