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Mortgage brokers can take advantage of commission advances to maintain liquidity of funds

Mortgage brokers stay aligned with the real estate industry and despite not being a part of it plays a vital role in promoting the business.  Real estate buyers find good friends in mortgage brokers who do much of the hard lifting when buyers search for suitable financing options to fund their project.

The standard way of finding lenders is to comb through several options of mortgage offered by various lenders, study it well for making a meaningful comparison and then to shortlist a few. The next step is to talk to the shortlisted companies, negotiate and finalize one that seems to be right for you. It is a cumbersome exercise no doubt, and not easy for most.

The role of mortgage brokers
Mortgage brokers maintain a massive database of lenders and can provide various loan options to buyers. Without running about here and there, you get ready access to massive amount of information and a wide variety of options that makes it easy for you to pick the most competitive offer. The brokers would first know what you want and then scan through their database to provide a tailor-made solution.  Mortgage brokers have all the tricks in their bags to make clients happy. They complement real estate agents and often work in tandem for providing better service to clients.

How mortgage brokers earn
Mortgage brokers work in their capacity and obtain a license for extending liasoning service between prospective property buyers and the lending companies.  They charge a fee for their service, which they collect from either the lending company or the buyer, depending on the deal. 

The fee is a small sum, usually a fractional percentage that can go up to maximum 2% of the value of property deal.  It is the responsibility of the broker to declare the fees upfront, and there cannot be any hidden fees. Mortgage brokers receive the payment only after the deal closes.

Making up for the gap in payment
The gap between the time of striking a deal and receiving the payment can cause inconvenience to brokers, especially if it takes too long time for the deal to close. The delay in receiving the brokerage puts stress on the cash flow, as they have to continue with the business and need to infuse funds regularly.

To plug the gap and ensure that they receive the brokerage upfront, many of them avail commission advance for mortgage brokers. As the name suggests, the scheme works in the same way as it does for real estate agents. The broker approaches a commission advance company that agrees to pay the major part of the brokerage amount as soon as they receive the documents confirming the deal. In exchange, they charge a nominal fee for providing the service.

Everybody knows how much a bird in the hand is worth and mortgage brokers are just too keen to avail the services of commission advance companies.  The arrangement provides enough liquidity to the brokerage business that thrives on the quick inflow of money.
Mortgage brokers can take advantage of commission advances to maintain liquidity of funds Mortgage brokers can take advantage of commission advances to maintain liquidity of funds Reviewed by Dhanur Chauhan on 5:38 PM Rating: 5