Mortgage Broker Vs Mortgage Banker
To help better educate the consumer, Obsidian Financial Services has devised guidelines which help you to understand the many aspects to obtaining your home loan. Since the 2010 collapse of the mortgage industry, many aspects of purchasing and obtaining a home mortgage have drastically changed. Factors such as Income qualification, down payment, credit scores and verification of assets have all been affected by the enactment of the 2010 Dodd-Frank bill.
Since the enactment of this bill, paperwork and discloses have increased over 40% and have drastically increased the amount of work involved in processing, underwriting and final closing to attain a mortgage loan. The mortgage lending industry recognizes two types of companies, one is the mortgage broker, the other is the mortgage banker. As both will appear in the disclosure, rates and cost, there are substantial differences you need to understand in how they operate, approve and close loans.
The Mortgage Broker
This is by far, the most popular role you will see in the Mortgage Lending Industry. As licensing requirements differ from state to state, there are very few requirements for becoming a mortgage broker. A broker requires less industry knowledge to become licensed, is only approved in the states they operate in and fully dependent on the mortgage lender to underwrite and close loans.
The broker is responsible for the processing and submitting the loan to the lender for underwriting and closing of the loan files. The process is very time consuming and tedious and can take 3 times the amount of time to close a loan as opposed to going directly to a mortgage banker. The banker will have high turnaround times when it comes to setting up the loan, underwriting, compliance and finally closing. Turnaround times can be high as 45 to 60 days even if everything goes as planned and there are no issues with the file. In today’s high pressure world this is very hard to achieve and can become very stressful to the consumer. One way to avoid all the extra paperwork and stress is to go directly to the lending source, The Mortgage Banker.
The Mortgage Banker
A Mortgage Banker is the fastest and most convenient way to obtain your mortgage loan with the least amount of paperwork, time, stress, and most importantly, cost. The mortgage lender will generally have over a million dollars of net worth, a staff of processors, underwriters and loan closers that work on setup and compliance of your loan the right way and right away. Because most lenders are HUD approved and direct sellers to Ginnie and Fannie Mae, pricing for loans will be better, which in turn is then passed on to you, the consumer. The average turnaround time from start to finish for a loan is 2 to 3 weeks, and overall costs are about 30% less than with a broker. One way to check if a lender is approved with Hud is to go to https://entp.hud.gov/sfnw/public/ , click on single lender, type in the lender’s name and from there you can see all the statics for the lender. They will help you have the confidence in knowing who you are dealing with.
As, you can see, going with a broker is a long, costly and stressful way to obtain a home mortgage. Your fastest and safest bet is to work directly with a lender so you can quickly become a happy new homeowner! Obsidian Financial Services is a Lender, and we fit all the lender criteria we described. When you start your loan with us, you’re not just getting a loan from any lender, you are joining the Obsidian Financial Services Family, and your loan will be delivered “the Obsidian way!”