A Mortgage broker can worth his weight in terms of gold and diamonds for providing his expertise and services. A mortgage broker usually plays a mediator role in most cases. For example, if you want to lease a car or want to obtain a loan from any financial institution, the role of a mortgage broker gets important.
Generally speaking, the mortgage brokers are categorized into two types:
Mortgage Broker Who Charges Fee
A mortgage broker who charges a fee from customers has to notify the client in writing before charging any fee for the provision of his services.
- If he does not notify the customers about the fee then he is not supposed to take any fee from the customers.
- But if he informs then the customers are liable to pay his fee in full settlement.
Usually, the fee that he charges from the customers is referred to as the “mandate”.
In this case where mortgage broker charges his fee, he usually earns twice for his services. This practice of earning from both ends is called “double dipping”. He earns once from his customer and one from his lender.
Mortgage Broker Who Does Not Charges Fee From the Customers
The second category of brokers is related to those mortgage brokers who do not charge any fee from his customers.
Now the question is how they compensate themselves for their services?
- The simplest answer to this question is that these types of mortgage brokers usually charge their fee only to the lenders.
- It is seen that the mortgage brokers who generally have more experience and repute in the market do not charge any fee from their customers.
- These brokers receive a handful amount of payments at the end of the loan period in case of the loan and at the end of the lease period in case of the lease agreement.
- Some brokers receive a small portion of their payment on a monthly basis.
In some other cases, mortgage brokers provide services to customers without ensuring any guarantee on their part.
New To The Industry
It is also seen on certain times that when a mortgage broker introduces himself to the existing market, he usually does not charge his fee, merely to attract as many customers as he can to build his goodwill. But once he builds his goodwill after some time, he starts charging his fee.
In the end, you can say that a mortgage broker who has the ability and confidence along with expertise, will definitely have more success and achievement in the market than others. For a good broker, consideration is a secondary thing, first thing is to satisfy the customers to settle the loan or lease. Even some mortgage brokers may worth their services in terms of jewelry or in kind as well.