Commercial mortgage broker
| Commercial mortgage broker |
|---|
| See also |
Commercial mortgage broker is a person dealing in financial intermediation on the real estate market.
When choosing a mortgage, all solutions that minimize costs are always included. There are many ways to take a mortgage in different ways. When choosing the right method, the key factor is to consider the benefits of the right method.
Analysis of the selection of the broker is a common method in choosing the right financing for a property. Most people think that these are significant costs, but nowadays it works differently[1]
An important issue is that the mortgage broker does not need a license to provide his services. Undoubtedly, he undergoes various types of training packages that facilitate his work.
Inference Process
Locating the right lender is difficult in the current market due to factors such as:
- time,
- number of lenders,
- costs,
All these determinants can bring added value when we use the services of a financial intermediary. The broker has a wide base of lenders with current offers. In this way, we can fit in the time barrier thanks to the actions of an intermediary. The professional has a whole range of different offers on the market, in different combinations, which makes it easier to choose the right loan[2].
Applying for one lender risks losing a lot of time. When we apply to one lender, after a long wait, the application may end in a negative decision, and then you must apply to another institution. The broker is able to submit an application to many lenders at one time and then choose the most convenient offer.
Broker Profit
In the past, brokers charged commissions for providing this type of service. At present, the vast majority of mortgage brokers include their salary in the costs of the lender. Thanks to this type of activity, no amount is charged to the client, the loan company gains the client, and the broker receives a commission from the lender.
The commission for the broker is determined individually with each loan granting company. It usually consists of a percentage rate, i.e. a percentage of the loan is paid out. The entire commission is divided, respectively, for the intermediary company and the intermediary processing the entire mortgage[3].
This method guarantees that the person processing the application will act in the best interest of the client. When building relationships, the broker wants to be in constant contact with the client, because he can adjust the offer to the client's needs at any time.
Once the intermediary receives remuneration from the loan company, it is proportionally divided between the persons in the company. In this way, the lender makes a profit from interest on the loan that the client pays for a specified period of time contained in the contract and the one-time commission paid to the agent slightly reduces the income[4].
Footnotes
References
- Gineris P.J., (2008), Getting Started as a Commercial Mortgage Broker: How to Get to a Six-Figure Salary in 12 Months, John Wiley & Sons, Hoboken, New Jersey.
- Gitman L.J., Joehnk M.D., Billingsley R., (2013), Personal Financial Planning, Cengage Learning, Mason, USA.
- Reurink A., (2016), Financial fraud: A literature review, Max-Planck-Institute, Cologne.
- Sirota D, Barrell D., (2003), Essentials of Real Estate Finance, Dearborn Real Estate, Chicago.
Author: Kacper Chmarzyński
