A mortgage broker can be helpful in the lending process. A broker does not lend money; instead, they are a company which offers loans from a variety of lenders. The lender still controls the terms of the loan and makes the final decision on whether to offer the loan.

The broker is given a wholesale loan rate from lenders. They then offer loans to consumers for a higher, or retail rate.

Brokers provide a number of services to consumers. By dealing with a large number of lenders, brokers are able to find specialized loan products for almost any type of borrower. Borrowers in unique or difficult situations, including, for example, those residing in foreign countries or those who have a short window of opportunity on a property and need to close quickly may have a difficult time getting the appropriate service from a lender. A broker, however, is better-equipped to deal with a variety of problems.

Brokers can also advise prospective borrowers on their financial situation and explain to them any problems that they are likely to face when applying for a loan. In meeting with borrowers, brokers get a better picture of their goals and borrowing ability and use that knowledge to find the best loan possible for their clients.

Brokers also provide a valuable service to lenders. Aside from the obvious business-development services, brokers assemble the information required on a borrower and on a property for the lender. They also provide the borrower with the various federal and state disclosures that lender is required to furnish.

The ability to shop a larger number of sources for loans makes the broker's service a valuable one. The wholesale rate that they are given means that some of the cost for the broker's service is borne by the lender. This cost is returned to the lender through not having to do as much legwork to sell a loan.