When it comes to a mortgage loan, it could be a long process, but not with a mortgage broker. The mortgage broker Melbourne acts as an intermediary who brings you and your mortgage lender together. It helps you (the borrower) connect with the lender and seek out the best fit, in terms of your financial situation and interest rate need. Directly speaking, the mortgage broker will look for the right mortgage loan that fits you, as the borrower, according to your current financial status, and a good interest rate that you can afford to pay.
The mortgage broker will gather all the paperwork, from the borrower and submits it to the mortgage lender for two different purposes:
- underwriting
- approval
The broker will earn a commission from either the lender, borrower or both when closing a deal.
How does a mortgage broker work?
A mortgage broker will act as an intermediary or middleman between the borrower and the lender in the market. Whether a potential borrower buying or refinancing a new home or car, a broker will gather loan options from different lenders, which the borrower would consider. But, the mortgage broker makes sure that these loan options are qualified for the borrower. Also, the broker will collect financial situation, such as:
- Income
- Assets
- Employment documentation (credit report, other info to assess the borrower’s ability to secure financing)
This information gathered by the mortgage broker will be submitted to the potential lender once the borrower is decided on which lender to get a mortgage loan. The broker will determine these three steps for the loan processing:
- Appropriate loan amount
- LTV (Loan-To-Value) ration
- Borrower’s ideal long type
After these three steps, the mortgage broker submits the loan to the chosen lender of the borrower for approval. The broker will communicate with both the borrower and the lender for the entire transaction through closing a mortgage loan deal. Once agreed, the mortgage funds are loaned under the name of the mortgage lender. The mortgage broker will collect a commission called an “origination fee” from the lender – compensation for the services.
The borrower is the one responsible for the payment of all borrowed loan amounts, including the fee for the closing statement. The broker will only get the payment for its services once the loan transaction is completed.
What is a closing statement?
A closing statement is a paper or document that records all the details of the financial transaction. The homebuyer financing the purchase receives the closing statement from the bank. While the home seller receives a closing statement from the real estate agent handling the sale.
Take note, all loans are accompanied by a closing statement, even though it varies in complexity.
If you are a borrower searching online for a reliable mortgage broker, then you should look for one in Melbourne.
