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Brokers usually charge a small percentage of the loan amount (generally 1 to 2 percent) for their services, which the lender pays for (but passes on to you as part of the cost of your mortgage).
Not all lenders are alike. Here’s how to distinguish them, and why it matters for your mortgage.
Mortgage lender vs. mortgage broker Though they sound similar, mortgage brokers are quite different from mortgage lenders. Brokers don’t originate mortgages themselves.
A correspondent lender originates, and unlike a mortgage broker, underwrites, and funds mortgage loan using their own funds. [1] The initial loan is usually made in the name of the correspondent lender, and then after closing, the loan is either sold to a larger primary lender or on the secondary mortgage market.
A mortgage banker is tied to one financial institution, while a mortgage broker works independently of lenders. As a result, mortgage brokers can help you compare options from various lending ...
Sometimes, a third party is involved, such as a mortgage broker. This entity takes the borrower's information and reviews a number of lenders, selecting the ones that will best meet the needs of the consumer. [3] Origination is regulated by laws including the Truth in Lending Act and Real Estate Settlement Procedures Act (1974).
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