Agricultural Mortgage Brokers

Agricultural mortgage brokers provide specialized services in mortgage financing sector. The structure of mortgage financial market has developed to recognize the function of the loans broker as highly important and necessary.

Previously a mortgage lender used to be either mortgage bank or private authority. But the increasing complexities, variations and demands for the financial products have developed a market for these services to be offered by a broker. The financial market with all its products and complexities has realized the need of a proper dealership to market the products with much more efficiency and effectiveness. This new recognition of a changing need has created a group of financial organizations known as loan brokers or mortgage brokers.

Mortgage brokers are generally the dealers of the financial products, specifically of loans and bonds. An agricultural mortgage broker is specialized in providing agricultural mortgage loans. There are various mortgage companies that offer the same service, but with their own special ‘twist’ or ‘specialty’. A particular bank or lender market their own products and offer advice specifically to their product. But the brokers operate as the impartial organizers who work for the benefits of the borrowers and offer advise on mostly all possible products in the market.

The rural mortgage brokers actually work as the mediator between the lender and the borrower. When in doubt, the borrowers can freely consult the brokers. The brokers are responsible to provide personalized and reliable advice for the best benefit of the borrowers. While a particular lender will offer limited choices, both of products and advice, restricted by their own ability or product range; a broker will enrich people with a general market view by providing analysis of a wider range of products and their essential features.

In case of a rural mortgage broker, the association generally provides all the services provided by a normal broker, but only for the rural development sector. The agricultural mortgage covers not only the loans for purchasing or developing the farming lands or machines; but it also includes investing in rural development as well as in equestrian, horticultural etc. With repeated government endeavor to revive the agricultural financial market, the brokers perform a major role in drawing people to invest more in agricultural sector. The function is quite similar to that of the real estate broker in urban area.

The brokers provide an in-depth analysis of the prevailing mortgage interest rate, as well as the personalized suitable mortgage rate for the borrower. The analysis goes on both macro and micro level. A compact view of the mortgage loan rates helps the borrowers to choose the right financial program. Not only for the first time borrowers, but the brokers also help the on-going borrowers to deal with critical financial situation by providing necessary information on refinance mortgage and other related programs. Through the best refinancing mortgage the borrower can be assured of a fast recovery of a critical financial condition.

Various provinces have different rules on the functioning of the brokers. But they generally are highly controlled by the governmental regulation to work for the best benefit of the borrowers. The brokers help in not only providing important information and analysis, but when the borrower chooses the lender they then work as the mediator. The broker helps the borrower to complete the application process by advising on documentation, form fill up and repayment agreement. It becomes the duty of the broker to explain all the intricate details of the agreement to the borrower. Many states have legal restrictive measures against the fraud brokers, who work covertly to promote a particular lender, rather that for the benefit of the borrower. So before the borrowers finalize the deal, it is advisable to make sure to choose the best and most reliable agricultural mortgage brokers.

The Secret Life of Mortgage Brokers

You already know that mortgage brokers come in many flavors, that some of them deserve the bad reputation dished out to them lately. You”re also smart enough to know that they serve a great function: getting you mortgages that your bank cannot.

To better understand how mortgage brokers are useful to you, you should know how they operate and get paid.

Mortgage Brokers in Action

When you get a home loan from your local bank, there may be only one player involved, your local bank. Banks that originate a home loan and hold on to it are called portfolio lenders. Many banks, however, do not hold onto the loans they originate. They sell the loans for a profit. They may sell your loan to another lender, directly, or they may sell it to a wholesale buyer.

In other words, many banks behave exactly like mortgage brokers.

The process goes like this:

You go to mortgage brokers to get a loan. The first thing they do once they have your credit scores, down payment (equity) and the amount you want to borrow is find out if Fannie Mae (Freddie Mac) will buy your loan and under what circumstances.

It’s all computerized. Your broker inputs your information in the system, the system comes back with: you qualify or you don’t qualify. Actually, it comes back with numbers, percentages: how much you can borrow and what interest rate you’re going to get and how much the broker is going to make.

How Mortgage Brokers Get Paid (Usually)

The interesting part comes here. Brokers are presented with 3 income levels for themselves. Which means: if they give you the lowest interest rate you qualify for, they make a low amount, if they give you a higher one, they make more money.

Specifically, it will come like this:

Interest rate of 5.04% – the broker earns 1.25% of the loan amount.

Interest rate of 5.15% – the broker earns 1.50% of the loan amount.

Interest rate of 5.30% – the broker earns 2.25% of the loan amount.

On a $200,000 home loan, this means your broker’s company can earn $2,500 or $3,000 or $4,500. Sometimes, overhead alone does not allow your broker to quote you the lowest interest rate you qualify for. Overhead makes many brokers turn away applicants who want to borrow small amounts.

Once brokers are assured that your home loan fits Fannie Mae criteria and you’ve accepted the interest rate, they will look for a wholesale buyer who can work with your particular circumstances.

The wholesale buyer who gets your home loan turns around and sells it to another wholesale outfit or to an investor (this could be a bank, a hedge fund, a pension fund, a private person or any company that has the money). I heard mortgage brokers complain they sold a home loan for $X and the wholesale buyer sold it within a week for $6,000 or 7,000 more.

You make a lot of people a lot of money when you take out a home loan.

Some of the biggest wholesale buyers are the big banks.

You could enter into an agreement with mortgage brokers whereby you pay them directly and there’s no spread premium (they do not get paid more if you get a higher interest rate loan).

Mortgage Broker Pitfall

Sometimes, your broker has a particularly good relationship with a particular wholesale buyer (they pay better, they are easier to work with, etc.). In this case, many mortgage brokers try to get every customer they have to go through that wholesale buyer, even when there isn’t a good match.

That’s one of the occasions when your mortgage broker will ask you if you can bring extra money at the closing, if you have someone willing to co-sign. It is also when some mortgage brokers break the law.

As different mortgage brokers have different buyers for the home loans they generate, different overhead and different profit margin needs, you get different interest rates. All of them and all lenders base whatever interest rate they quote you on the same thing, the rate the FED charges banks when banks borrow money from the fed.

Not Your Mortgage Broker’s Fault

Mortgage brokers have to work within this system, unless they’re also a portfolio lender. To be a portfolio lender for all the mortgages they generate, brokers would have to have a lot of money, hundreds of millions. And, you’ve guessed it, most of them don’t have that kind of money in their wildest dreams.

Important Qualities Developed During Mortgage Broker Training

For most people, transferring to a new home may both be the hardest yet the most exciting thing to do. Leaving all your past behind and starting a new life could be good reasons for change. Meeting new people in the neighborhood while keeping the previous ones will add zest to anybody’s social life. However finding and closing a mortgage loan can prove to be a challenge on its own. This is probably why people who have undergone mortgage broker training is very in demand due to their line of work, and their ability to make dreams happen.

Mortgage brokers serve as an important link for the borrowers and the lenders.It is rather not easy to find a bank or lending institution that will give out mortgage loans in an instant. There are simply too many things needed to do like forms to be filled up, backgrounds to be checked, credit ratings studied, and ability to pay must be assured. In all these troubles just to be granted a mortgage loan, one person could make everything easier; a person with a great mortgage broker training background.

In order to excel in such field, mortgage brokers need to develop certain aspects in their personality that will be very useful in their field of work; qualities that are either inert to themselves or are achieved and developed only through constant training as well as exposure to the ins and outs of the industry. Read along as I lay each one and point out their importance to the profession.

Special Interest in Real Estate Market

Since mortgage brokers pretty much work along this line of field, they must have an inert interest and flare for the real estate industry. It is easy to distinguish if a person is working with his mind or with his heart. Real estate is a very big business opportunity and only those who are deeply interested in making it big, will be granted the bigger piece of the cake. Brokers need to be updated with all that is happening in and around the real estate market in order to keep in step with the changing times.

Ability to Communicate Well

In a type of job where a simple miscommunication can cause immense impact on its result, it is a must that a mortgage broker should and will be able to communicate very well both to his client and the lenders. Most of the time, clients seeking for a mortgage loan are not totally equipped with the necessary information for it. At times, they may not even know a little about the laws governing the deal. The burden now lies to the ability of the mortgage broker to dissect this seemingly “alien” information to the borrower and turn it into something easy to understand to make sure that he/she will not be left in the dark.

Mortgage brokers also need to establish rapport in order to gather as much contacts as possible. In this line of work, contacts with people on the lending sector are the bread and butter of any broker. Without these contacts, there will be no loan assurance that can be passed on to the borrower. Without these contacts, being a mortgage broker could be a lot harder than what it originally is.

This is where the broker’s inter-personal skills will be tested. He must make himself available for these lending companies, and he must make sure he gets on the good side of the people behind the loan approval section. The ability of the mortgage broker to keep good relationships with the lending institution, will most likely result to more updated company facts that he can use in order to turn it into an approved loan for his client.

The communication pathway between the broker and the client, as well as the broker and the lending institution must be open and clear at all times. This is to ensure proper information dissemination on the client’s side, and accurate terms on the lender’s side. These qualities will be given importance during mortgage broker training sessions and will be put to the test on the actual field.

Knowledge on Mortgage Industry Laws

People say that no soldier must go into battle unprepared. So are mortgage brokers. They need to arm themselves with the necessary knowledge about laws related to the mortgage industry itself. In most cities, there are federal and state laws governing the real estate as well as the mortgage brokerage. It is also not enough to be acquainted or familiarize these laws; a brilliant broker with a good mortgage broker training background must be able to explain these laws clearly to the borrowers. He must also be able to discuss with the client everything that is written on the loan agreement form and make sure they understand each statement before letting them sign it. Information about borrower default and other issues must be clearly understood by the client before closing the deal.

Keen Eye for Details

Mortgage brokers must develop a keen eye for details when interviewing his client. He must listen to what they are specifically looking for and what they are capable of paying. It is also a must for the broker to check the credit status and background of the borrower in order to make sure he got all the information needed before he can match it up with the best possible lending institution. This is rather important because the broker must also make sure he is giving these institutions legit clients that are not hiding anything or else risk losing contacts and good relationship with the company and having a tarnished reputation on the field.

These qualities are not developed overnight. A broker must be willing to nurture it from the moment his mortgage broker training took place until the time he is up and running on the actual world. Practice makes perfect as they say, and that is the only way you can excel in this field of work.