Mortgage Broker

A A A

DEFINITION

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

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. Mortgage Originator

    An institution or individual that works with a borrower to complete a mortgage ...
  2. Predatory Lending

    Unscrupulous actions carried out by a lender to entice, induce and/or assist ...
  3. Third-Party Mortgage Originator

    1. A person or company involved in the process of marketing mortgages and gathering ...
  4. Conventional Mortgage

    A type of mortgage in which the underlying terms and conditions meet the funding ...
  5. Mortgage Banker

    A company, individual or institution that originates mortgages. Mortgage bankers ...
  6. Origination

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

    A type of financing arrangement in which the outstanding mortgage and its terms ...
  8. Loan Officer

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

    A contractual agreement where the right, or rights, to service an existing mortgage ...
  10. Mortgage Pipeline

    Mortgage loans that have been locked in with a mortgage originator by borrowers, ...
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

  5. 5 Tips For Recession House Hunters
    Home & Auto

    5 Tips For Recession House Hunters

  6. Why It’s So Hard to Get Small Mortgage ...
    Credit & Loans

    Why It’s So Hard to Get Small Mortgage ...

  7. Top Reasons To Apply For An FHA Loan
    Credit & Loans

    Top Reasons To Apply For An FHA Loan

  8. Measuring The Benefits Of Home Ownership
    Home & Auto

    Measuring The Benefits Of Home Ownership

  9. Mortgages: Fixed-Rate Versus Adjustable-Rate
    Credit & Loans

    Mortgages: Fixed-Rate Versus Adjustable-Rate

  10. 5 Things You Shouldn't Do During A Recession
    Budgeting

    5 Things You Shouldn't Do During A Recession

comments powered by Disqus
Hot Definitions
  1. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  2. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  3. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  4. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  5. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  6. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
Trading Center