Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Mortgage Broker

What it is:

A mortgage broker is an agent who connects property buyers with mortgage lenders.

How it works (Example):

A mortgage broker acts as a professional intermediary on a property buyer's behalf. A mortgage broker collects the property buyers' personal and financial information and connects them with mortgage lenders with competitive rates and mortgage terms. If the mortgage lender approves the property buyer's application, the mortgage broker collects a commission determined by the lender.

Why it Matters:

The role of a mortgage broker is solely to bring property buyers together with mortgage lenders. The mortgage broker has no involvement in the actual lending. For this reason, it is important not to confuse mortgage brokers with mortgage bankers, which are individuals and institutions with the financial resources to fund mortgages.

Related Terms View All
  • Quarterly Income Preferred Securities (QUIPS)
    QUIPS are shares of preferred stock issued by a special purpose foreign or domestic LLC....
  • Tape Shredding
    Let's say Company XYZ is a huge pension fund with billions of dollars under management....
  • Obligation Bond
    The face value of an obligation bond is usually larger than the value of the property...
  • Primary Uptrend
    A primary uptrend is when each successive advance of the primary trend peaks and troughs...
  • Pale Recession
    Former Federal Reserve Chairman Alan Greenspan coined this term in a 2008 television...