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Originally Posted by BlaqK20
Thanks that was a lot of helpful information. I'm kind of new to all the structural parts of loans and mortgage in general. Could you explain to me how brokering is different?
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Well, if you are not brokering and doing mortgages it is likely you are working for a Bank/Credit Union. If this is the case, it is likely that the institution you work for is actually lending the money. This allows you to have a lot more flexibility with your own products, get exceptions much easier, and you personally only need to know one institutions products.
A Broker, however, does not typically lend money. Basically, my job is to find a client, find that client a lender, and hook them up. I take care of the application process, obtain information/verifications from the borrower(s) Work some figures - and sometimes magic, lol, but in essence I am just the face that the customer knows. I have to know - with intimate detail - products offered by many different companies (currently we work with nearly four dozen lenders, each lender usually has a large variety of products. One that we work with has over 700 programs) I need to figure out which product/lender will suit the customer best, be it the best interest rate, highest loan to value ratio, or just getting the deal closed. I have very little flexibility when it comes to getting exceptions, and the closing and funding is dealt with by Title Companies instead of the brokers. In most instances (of course, there are ALWAYS exceptions) the title companies will be in charge of getting the closing docs drawn up. In a typical purchase transaction, you need to find a date and time that works for the buyer(s), seller(s), real estate agents, title company, and yourself.
Simply, brokers buy and sell money at different prices, which leads me to the next point - we are paid vastly differently than most, if not all, institutional employees. Most brokers are straight commission, and the way you get paid takes a bit of getting used to. We can be paid by the lender, the borrower(s), sometimes even the seller(s) - or a combination of all three.
You'd want to make sure that you have the following characteristics before you even consider brokering -
- You deal with rejection well
- Salesperson at heart
- Willing to put in long hours when necessary
- Handles stress well (very important, probably the number one reason some people don't hack it)
- Comfortable with a fluctuating salary - with enough savings in the bank to handle a couple bad months
- Network well (a significant portion of business is obtained from referrals)
- Learn quickly - the rules constantly change
- Creative thinking - this will come into play when you are financing a bit more creative deals...