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A travel agency owns no airplanes. They are paid a commission by the airlines to book passengers on the airline’s planes. The cost to the passenger is the same whether they use a travel agent or go directly to the airlines to book their ticket. The cost to the airlines is basically the same as they would have to pay their own employees the commission they pay to the travel agent. The advantage to the passenger, by using a travel agent, is that the travel agent can shop for the best airlines based on price, schedules, and comfort. A Mortgage Broker is very similar to a travel agent. They have no money of their own to lend, however, they are paid a commission by banks and lenders to originate and submit home loans to them for funding. They are paid similar commissions as the banks own loan officers. Therefore, it does not usually cost the borrower any more money to use a Mortgage Broker than it does by going to the bank directly. The advantage to the borrower is that the Mortgage Broker can shop for a bank that has the best price and loan terms based on the individual borrower’s qualifications. In addition, if a new program becomes available during the application process, a Mortgage Broker can switch lenders without having to re-originate the loan or re-appraise the property. Finally, a Mortgage Broker can submit your loan to a Wholesale Lender, who will not accept your application directly. |
