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Brad Kidd
Brad Kidd is a graduate of Florida State University with a BS degree in Accounting and Finance. He has worked as a management consultant for Ernst and Young in Dallas, Texas, and moved to Wichita in 1999 to begin Midwest Financial Services, LLC. His expertise include personal and corporate finance, strategic planning, and debt re-structuring. Midwest Financial Services, LLC has Mortgage Brokerage operations in Oklahoma City, Little Rock and Wichita.
Banking & Finance
2003-05-01 12:39:00
Mortgage broker or banker
:   What is the difference between a Mortgage Broker and a Mortgage Banker and where can the consumer get the best deal?
ANSWER:  Mortgage Brokers use their affiliations with independent wholesale lenders to secure financing for their clients.  Mortgage Brokers are not lenders in that they do not make or fund loans in their own name.  They serve their customers by shopping many lenders to get the best loan possible for their clients.     Mortgage Bankers differ from Mortgage Brokers in that they act as the bank and actually issue mortgage loans in their name and provide the cash to fund the loan at closing.  This is usually accomplished through the use of a warehouse line of credit.  The Mortgage Banker will then sell the consumers note to an investor or other lender in order to replenish their warehouse line of credit and issue new loans.For the consumer, either option can result in the best deal.  Good Mortgage Brokers have lots of affiliated wholesale lenders and constantly update these relationships to remain competitive in the marketplace.  It is the offerings of the wholesale lenders that determine the quality of the consumers deal, not the Mortgage Broker.The same can be said of Mortgage Bankers.  Their investors, or buyers of their loans, ultimately determine the quality of the consumers’ deal as these investors determine the interest rates, and sometimes, the fees charged.     In the final analysis, the consumer should consider the costs of the mortgage loan against the services provided by the Broker or Banker.  Often times the cheapest option is not the best when professional services are needed.  The better companies will earn their fees by streamlining the process and minimizing the "brain damage" that sometimes comes with securing mortgage financing.  Look for in-house processing services, quick approvals, willingness to attend your closing, and competent professional loan officers.  If you consider all these variables, chances are you will be pleased with your choice of Mortgage Broker or Mortgage Banker.
 
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