Mortgage brokers help make the mortgage industry work better and more efficiently.
Mortgage brokers are intermediaries that assist both consumers and lenders alike. The mortgage brokers knowledge of mortgage markets, creates competition and choice amongst lenders.
This competition leads to lower margins throughout the industry. Additionally, competition leads not only to better pricing and decreased margins but also improved levels of service.
Mortgage professionals working at mortgage brokers tend to be more experienced. It’s this experience that helps educate consumers about the nuance and complexities of the loan process. Most mortgage brokers are small businesses, that rely on referrals as their primary source of business. Mortgage brokers are not multibillion-dollar corporate machines that feed off marketing and advertising.
Often, large corporations could underperform repeatedly, yet they could still open their door tomorrow to see a line of clients in wait. Contrary, mortgage brokers must outperform their competitors and build positive relationships in the communities they serve. Brokers rely on their quality of service to build reputation without a large marketing budget.
As a small business owner that relies on client satisfaction, mortgage brokers must be diligent in their levels of service from initial contact throughout the closing process and beyond. Not only must we deliver a low priced commodity but we must do so in a manner that is clear and digestible to the consumer. This is no easy task. The mortgage industry is not always fully transparent, as additional regulation has created a complex mountain of paperwork and disclosures meant to clarify the transaction for the consumer. Here is where the mortgage broker can excel with improved consumer education and provide a clear value to the consumer.
Consumer fears in the marketplace often drive them to “trusted” corporate players regardless of pricing. It may be difficult for clients to understand how a small business can provide a cheaper alternative to the large retail banks, but through our education of the consumer where we can demonstrate how as a wholesaler of other lenders products, that we are able to deliver a high-quality product at a lower cost.
This is where mortgage brokers not only help consumers but benefit lenders too. There are many small lenders nationwide that utilize the mortgage broker to help broaden their reach. Mortgage brokers create an effective scalable origination channel for smaller lenders that may not have access to certain market places. We help reduce their risk by maintaining the overhead cost of the mortgage origination business.
Whether we deliver that lender 1 loan per month or 10, we incur all operating expenses in running the business. This allows our wholesale lenders to provide us with discounted products and services that we are able to deliver to our clients at better and more competitive pricing. I am not saying that mortgage brokers always have the better “price”, but we are delivering mortgages to consumers at lower costs and rates with higher levels of service than many of our competitors.
— Jim Barry
President, CMC - Certified Mortgage Consultant
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