Mortgage Broker

AAA

DEFINITION of 'Mortgage Broker'

An intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages. A mortgage broker gathers paperwork from a borrower, and passes that paperwork along to a mortgage lender for underwriting and approval. The mortgage funds are then lent in the name of the mortgage lender. A mortgage broker collects an origination fee and/or a yield spread premium from the lender as compensation for its services.

INVESTOPEDIA EXPLAINS 'Mortgage Broker'

A mortgage broker is not to be confused with a mortgage banker, which closes and funds a mortgage with its own funds. Mortgage brokers frequently facilitate transactions for mortgage bankers.

RELATED TERMS
  1. Conventional Mortgage

    A type of mortgage in which the underlying terms and conditions ...
  2. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  3. Origination

    The process of creating a home loan or mortgage. During the origination ...
  4. Assumable Mortgage

    A type of financing arrangement in which the outstanding mortgage ...
  5. Loan Officer

    Representatives of banks, credit unions and other financial institutions ...
  6. Mortgage Servicing Rights - MSR

    A contractual agreement where the right, or rights, to service ...
Related Articles
  1. Understanding Your Mortgage
    Personal Finance

    Understanding Your Mortgage

  2. Career Comparison: Real Estate Agent ...
    Brokers

    Career Comparison: Real Estate Agent ...

  3. Understanding The Mortgage Payment Structure
    Credit & Loans

    Understanding The Mortgage Payment Structure

  4. The Reverse Mortgage: A Retirement Tool
    Options & Futures

    The Reverse Mortgage: A Retirement Tool

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center