AAMB

Consumer FAQ's

Frequently Asked Questions

Why should I choose a mortgage broker?
Studies show over 50% of Americans use mortgage brokers for financing. Brokers provide consumers with choice, convenience and experience. The consumer receives an expert mentor through the complex mortgage lending process. The broker offers the consumer extensive choices and access to affordable home loans while balancing the consumer's financial interests and goals.

Have more Americans been able to buy homes because of mortgage brokers?
Yes! Mortgage brokers have been pioneers in the "subprime" credit market, using innovative loan packages to allow low to moderate income borrowers, with less than perfect credit histories, to start enjoying the benefits of home-ownership.

Does the mortgage broker really care about the quality of the loan itself?
Yes, absolutely. The safety and soundness of the mortgage lending community is directly linked to the success and integrity of its home loan originations. Furthermore, mortgage brokers represent the single largest residential origination source today, emphasizing that they play a significant role in the mortgage loan process. These numbers highlight the fact that consumers who exercise their choice, choose mortgage brokers; most likely because brokers are dedicated to their customers: consumers, wholesale lenders, and ultimately, American tax-payers.

Do brokers work for the lender they are selling my loan to or me, the consumer?
Neither. As an independent contractor, the broker allows wholesale lenders to cut origination costs by providing such services as preparing the borrower's loan package, loan application, funding process, and counseling the borrower. Brokers help keep loan rates low due to their minimal overhead and setup costs. Furthermore, the broker will seek the loan which best suits the borrower's financial circumstances, needs, and goals. From the consumer perspective, with rare exception, the broker does not get paid unless and until the loan closes. Thus, the broker has the ultimate incentive to provide the best possible customer service to the consumer.

Isn't the broker supposed to get the best deal for the consumer?
Since mortgage brokers offer the products of many wholesale lenders they often have the best selection. This question presumes that anyone can know what is "the best deal". While many would consider "the best deal" to mean "the lowest rate," a loan program with a very low interest rate may not be the best choice for a consumer with limited cash, if that rate comes with high points and fees. A 15-year loan may save a borrower tens of thousands of dollars in interest payments over a 30-year loan, but the higher monthly payments may not be acceptable to the consumer. So, "the best deal" for any consumer depends on his or her individual circumstances, needs, and goals.

Today over half the nation's mortgages are originated by mortgage brokers. This clearly indicates that consumers are choosing the superior options, service, and expertise offered by mortgage brokers. Brokers have forced retail lenders to compete with other loan sources driving down costs nationwide.

Don't brokers "steer" consumers to the lenders who pay the highest fees to the broker?
While isolated instances of adverse steering can occur, the mortgage brokerage industry has predominantly armed consumers with a free-market economy weapon: open and vigorous competition. Any consumer exercising his or her basic right to shop and compare, will ultimately find the loan options that are in his best interests. The combination of government-mandated disclosures and vigorous competition has presented today's consumer with unprecedented levels of choice. While price is an important consideration in advocating a specific wholesale lender, brokers also make their professional recommendations based on a number of other factors which include the lender's:

1) reputation for service
2) underwriting criteria
3) ability to close the loan on time
4) compliance with consumer's requirements