Mortgage Broker

A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses.

Traditionally, banks and other lending institutions have sold their own products. As markets for mortgages have become more competitive, however, the role of the mortgage broker has become more popular. In many developed mortgage markets today,  mortgage brokers are the largest sellers of mortgage products for lenders.

Mortgage brokers exist to find a bank or a direct lender that will be willing to make a specific loan an individual is seeking. 

Duties of a mortgage broker 

Banking activities can be divided into the following:

Retail banking: dealing directly with individuals and small businesses

Business banking: providing services to mid-market business

Corporate banking: directed at large business entities

Land mortgage banking: it specializes in originating and/or serving land mortgage loans

Private banking: providing wealth management services to high-net-worth individuals and families

Investment banking: relating to activities on the financial markets

Most banks are profit-making, private enterprises, however, some are owned by government, or are non-profits. Central banks are normally government-owned banks, which are often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. 

Central banks generally provide liquidity to the banking system and act as the lender of last resort in the event of a crisis.

The nature and scope of a mortgage broker's activities vary with jurisdiction. 

The work undertaken by the broker will depend on the depth of the broker's service and liabilities.

Typically the following tasks are undertaken:

marketing to attract clients

assessment of the borrower's circumstances (Mortgage fact find forms interview) – this may include assessment of credit history (normally obtained via a credit report) and affordability (verified by income documentation)

assessing the market to find a mortgage product that fits the client's needs. (Mortgage presentation/recommendations)

applying for a lenders agreement in principle (pre-approval)

gathering all needed documents (paystubs/payslips, bank statements, etc.)

completing a lender application form

explaining the legal disclosures

submitting all material to the lender

upholding their duty by saving their clients as much money as possible by offering best advice for the clients circumstances