Currently, consumers obtain a home loan through either a lender or traditional mortgage broker.
Now, there is a new way for borrowers to obtain financing.
Let’s take a look at the differences.
Lenders are banks, mortgage banks, or other financial institutions. These institutions offer loan products through various channels such as local
storefronts and online.
Borrowers only have access to loan products offered by the lender. To compare loan offers from different lenders, borrowers would need to correspond
with multiple lenders. In this scenario, lenders incur costs associated with originating a loan.
A mortgage broker is a middleman who is paid to bring together borrowers and lenders. They assist borrowers in gathering information and documentation
required by lenders. The borrower’s information is then presented to different lenders to determine which loan offers they qualify for. The borrower
then chooses the loan offer which they think is the best. The broker submits the loan request to the lender for final approval and funding.
Mortgage brokers are compensated an average of 2% of the loan amount and may also charge a processing fee.
TrueFi is not a lender or your traditional broker. TrueFi provides easy-to-use online tools and services that assist borrowers in preparing loan requests and grants
borrowers direct access to a network of lenders and their loan offers for the purposes of obtaining a home loan.
Click here to see how it works.
Let’s compare the TrueFi difference for a conventional refinance loan of $150,000 at a 30 year fixed rate.1
||TrueFi charges a fee of 1/2% of loan amount or minimum $1,500 flat fee whichever is greater.
|Traditional Mortgage Broker
When a mortgage broker is paid by the consumer, the average broker fee is 2%2 of the loan amount
($3,000) plus an average processing fee of $4953.
||Lenders incur costs associated with originating a loan. These costs are recovered through higher rates and/or fees.