What is the role of a mortgage broker?

A mortgage broker serves as an intermediary between borrowers seeking loans and lenders providing those loans. They facilitate the loan process by matching borrowers with appropriate loan products and lenders that best fit their financial needs. This role is crucial as brokers have access to various lending sources and can provide borrowers with a range of options.

Although a mortgage broker may assist in the origination of the loan, they do not actually underwrite or fund loans themselves. Underwriting involves assessing the risk of lending, while funding refers to the actual provision of the loan amount by the lender. Instead, the broker's job is to gather necessary documents, assist in the application process, and negotiate terms with lenders on behalf of the borrower.

This understanding highlights that the choice indicating a broker as a company that originates a loan but cannot underwrite or fund it accurately reflects their function in the mortgage industry. Mortgage brokers rely on lenders for those critical last steps in the loan process, ensuring they do not operate as direct lenders.