NATIONWIDE MORTGAGE BROKERAGE

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The key difference between a ”mortgage brokerage” and a ”mortgage company” lies in their roles and how they operate within the mortgage lending process:

Mortgage Brokerage

- A mortgage brokerage is a firm or business that acts as an intermediary between borrowers and mortgage lenders. The brokerage employs mortgage brokers who work with borrowers to help them secure mortgage loans from various lenders. The primary function of a mortgage brokerage is to find and arrange suitable mortgage products for clients based on their financial situation, creditworthiness, and specific needs.

- Role: They act as a middleman between borrowers and mortgage lenders, shopping around to offer a variety of loan options from different lenders. Mortgage brokerage’s do not lend money directly.

- Services: They gather necessary financial information from the borrower, compare loan options, and assist with the loan application process.

- Compensation: Brokerage’s typically earn a commission, which is either paid by the borrower or the lender, often based on a percentage of the loan amount.

Mortgage Company

- A mortgage company, also known as a direct lender, is a financial institution that provides loans directly to borrowers to purchase or refinance properties.

- Role: The company provides the funds for the loan and handles the underwriting, approval, and funding process. Mortgage companies can be banks, credit unions, or specialized lending institutions.

- Services: Mortgage companies offer loan products directly and are responsible for originating, underwriting, and sometimes servicing the mortgage over its term.

- Compensation: Mortgage companies make money through the interest paid on the loan and often charge origination fees.

Key Differences

- Loan Options: Mortgage brokerage offer a wider range of loan options from multiple lenders, while mortgage companies offer loan products from their own portfolio.

- Who Provides the Loan: Brokerage’s connect borrowers to lenders; mortgage companies are the lenders themselves.

- Flexibility: Brokerage’s have more flexibility to shop around for better rates and terms, while mortgage companies may have stricter loan products and guidelines.

In summary, a “mortgage brokerages” works to find the best mortgage deal for a borrower from various lenders, while a ”mortgage company” lends the money directly to the borrower.