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Your Personal Mortgage Consultant MLO # 5202                                                                         NMLS # 107614


Fred W. Holland

Why Choose a Mortgage Broker?

 Frequently Asked Questions

Why choose a mortgage broker?
Brokers provide consumers with:                                                
The consumer receives an expert mentor through the complex mortgage lending process. The broker offers the consumer extensive choices and access to affordable home loans while balancing the consumer's financial interests as well as their short and long term goals.  

Are mortgage brokers lenders or bankers?
Neither. A broker is a real estate financing professional acting as an independent contractor with only your interest in mind. They have no affiliation to any specific bank or lender and generally can offer a more complete range of products and services because they have multiple sources to choose from.   

Does the mortgage broker really care about the quality of the loan itself?
Yes, absolutely. The safety and soundness of the mortgage lending community is directly linked to the success and integrity of its home loan originations. Mortgage brokers play a significant role in the mortgage loan process. This highlights the fact that consumers who exercise their choice, choose mortgage brokers; most likely because brokers are dedicated to their customers satisfaction and to the lenders they represent.

Should brokers be regulated?
Brokers are regulated by several federal laws and regulations and dozens of state laws and licensing boards. I absolutely support reasonable and fair state and federal regulation of mortgage brokers. As of January 1, 2007, Washington State has required that all loan originators be licensed.  In addition, up to 8 hours per year of continuing education is required by the State to maintain that license.  Licensing is NOT always a requirement for mortgage bankers.  In my mind, this requirement (or lack of) is another reason to choose a broker.

What role does the broker pay versus the wholesale lender?
The wholesale lender underwrites and funds the home loan, may service the loan payments, and ensure the loans' compliance with underwriting guidelines. The broker, on the other hand, originates the loan. A detailed application process, financial and credit worthiness investigation, and extensive disclosure requirements must be completed in order for a wholesale lender to evaluate a consumer's home loan request. The broker simplifies this process for the borrower and the wholesale lender, by conducting this research, counseling consumers on their loan package choices, and enabling them to select the right loan for their home buying needs.  This process can be arduous, costly, and seemingly impossible to the consumer. The broker works as the liaison between the borrower and the lender to create a cost effective and efficient loan process.

Do brokers work for the wholesale lender or the consumer?
Neither. As an independent contractor, the broker allows wholesaler lenders to cut origination costs by providing such services as preparing the borrower's loan package, loan application, funding process, and counseling the borrower. Brokers help keep loan rates low due to their minimal overhead and setup costs. Furthermore, the broker will seek the loan which most accurately suits the borrower's financial circumstances, needs and goals. From the consumer perspective, with rare exception, the broker is not salaried and does not get paid unless and until the loan closes. Thus, the broker has the ultimate incentive to provide high quality service to the consumer.

Isn't the broker supposed to get the most favorable mortgage loan for the consumer?
Since mortgage brokers offer the products of many wholesale lenders they often can offer consumers a wider selection of loan products. This question presumes that anyone can know what “the most favorable mortgage loan” is.  While many would consider "the most favorable" to mean "the lowest rate," a loan program with a very low interest rate may not be the optimal choice for a consumer with limited cash especially if that rate comes with high points and fees. A 30 year mortgage might offer a lower payment but a15-year loan may save a borrower tens of thousands of dollars in interest payments over a 30-year loan.  It's quite possible the higher monthly payments may be acceptable to the consumer. So, "the most favorable mortgage loan" for any consumer depends on his financial circumstances, needs and goals.

With many of the nation's mortgages being originated by mortgage brokers, this clearly indicates that consumers are choosing the superior options, service, and expertise offered by mortgage brokers. Brokers have forced retail lenders to compete with other loan sources driving down costs nationwide.

Don't brokers "steer" consumers to the wholesale lender who pays the highest fees to the broker?
While isolated instances of adverse steering can occur, the mortgage brokerage industry has predominantly armed consumers with a free-market economy weapon: open and vigorous competition. Any consumer exercising his or her basic right to shop and compare, will ultimately find the loan options that best fit their needs. The combination of government-mandated disclosures and vigorous competition has presented today's consumer with unprecedented levels of choice. While price is an important consideration in advocating a specific wholesale lender, brokers also make their professional recommendations based on a number of other factors which include the lenders:
                                                            reputation for service
                                                            underwriting criteria
                                                            ability to fund a loan on time
                                                            compliance with consumer's requirements

How do I choose a Mortgage Broker?
When it comes to choosing a mortgage broker, a personal recommendation from a satisfied customer is, as ever, invaluable.  But, there are other considerations as well. 
Q:  How long have they been in business?     A:  Since 1993.
Q:  Are they willing to give you recommendations from past clients?     A:  Absolutely and encouragedOver 500 families have turned to me to assist with their mortgage requests.  Almost 90% of my business comes from previous clients and their referrals..
Q:  Will they be available if you have concerns or questions?     A:  As my business is 100% referral based, I do not have to secure new business by newspaper ads, telephone canvassing or going door to door.  I am here and available to respond to your mortgage needs and to focus on your transaction.
Q:  Are they knowledgeable?     A:  I am approved to originate loans in Washington State which requires yearly ongoing education and licensing.  I am also a certified Washington state instructor for Mortgage Financing.   
Q:  Are they concerned for your best interest?     A:  In order to gain your satisfaction, your ongoing business and referrals to friends, family and co-workers I will work as hard as possible to gain your trust and confidence.  It has been my philosophy and the company’s mission statement to help to achieve your goals.  
It is my hope that you will allow me to assist with those goals and be a part of your mortgage planning needs.


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