Most people assume that bankers and lenders are mortgage brokers. But that’s not always true.
Often banks have several employees to fulfill these steps and their primary responsibility is to the bank.
However, an independent mortgage broker is responsible to YOU because, essentially, you are the broker’s employer.
Here’s what a mortgage broker does:
• Takes the loan application.
• Advises you on the different loan programs, choices for Primary Mortgage Insurance (PMI), and the amount of down payment that is ideal for your situation.
• Asks for all the correct documents necessary to complete the loan application.
• Reviews your paystubs for income accuracy, consistency, and any deductions from payroll.
• Reviews tax returns for income and/or loss; including income calculations according to underwriting guidelines.
• Reviews bank statements for deposits that are not payroll, and asks for client explanation and documentation, balances, and non-sufficient funds (NSFs).
• Asks about names other than the clients’ that may be on the bank statements.
• Obtains an access letter from any non-borrowing persons on the statement.
• Makes sure all the bank statements for deposit meet underwriting standards and guidelines for the type of loan being applied for.
• Reviews credit for the number of trade lines, balances, monthly payments, recentness of any late payments, making sure that all mortgages are reported.
• Reviews bankruptcy filing to make sure it matches up to the credit report.
• Reviews the divorce decree against the tax return for dependents and matches the age of the dependents with the number of years for continued child and spousal support.
• Reviews the title report for the amount and the number of mortgage liens, tax liens, vesting, and judgments.
• Orders appraisal.
• Orders title and escrow on refinancing.
• Asks escrow for a fee guarantee on the title and escrow on the purchase within 3 days of application or acceptance.
• Follows up on appraisal providing any permits, purchase contract or other documents needed by the appraiser.
• Reviews the appraisal for accuracy of time and distance of comps, accuracy of contract agreement, quality of pictures, and amount of rents.
• Orders and reviews estimated closing statement (called a HUD-1) for fees, impounds, any credits, etc.
• Interfaces with compliance, processing and underwriting as well as escrow and title.
• Updates realtors and escrow on a purchase transaction at every step.
• At loan approval, lets client know of any additional conditions needed and helps the client understand and fulfill those requirements if need be.
• Goes to doc signing in case questions should arise.
• Informs all parties when the loan has funded.
Buying a home can be very stressful. Knowing that your broker has your best interest in mind, is an invaluable asset.