What is the role of a mortgage broker?

The role of a mortgage broker is primarily to act as a mediator between lenders and borrowers. Mortgage brokers work to connect individuals or businesses seeking a mortgage to potential lenders, facilitating communication and negotiation between both parties. They help borrowers understand their options by offering a variety of loan products from different lenders, which allows borrowers to find terms and rates that suit their financial situations.

Mortgage brokers do not fund loans directly; rather, they rely on financial institutions to provide the actual funding. Additionally, they do not provide insurance against mortgage defaults, as this function is typically performed by insurance companies through mortgage insurance policies. While some brokers may assist in the process of packaging and selling loans to investors, this is not their primary role, and it usually pertains to larger financial entities involved in secondary mortgage markets. Thus, their main focus remains on the mediation process that helps borrowers secure financing in a way that benefits both the borrower and the lender.