One of the fundamental misunderstandings about financing is that real estate buyers and sellers do not realize that money is a commodity just like products in a supermarket. It is like bread, a car, a house or any other commodity. When it is bought and sold, the lender expects to make a profit on the sale. If the lender reduces one cost to a borrower in one area, the lender normally will raise it in another area to compensate the loss. For example, a lender offering a lower interest rate may charge more on loan costs, as well as a larger prepayment penalty, than a lender offering the higher interest rate.

It is the loan officer's job to help the borrower to choose the loan that offers the combination of features that best meets the borrower's specific needs.

The difference between Loan Officers working with a Brokerage and Lenders is that if your client shops at a specific bank the client will only have access to that bank's product. Loan officers working for a brokerage can choose from a wide variety of banks. Here are some of the main questions posed by some people.

Question: Why should the client go through a brokerage if they are getting the same product by going straight to the bank?

Answer: A brokerage has more options on where to shop for the right loan for the client.

Question: Why doesn't the client just go straight to the bank to get a better deal?

Answer: They can go to the bank but the bank will retail the loan to the client so they will charge usually the same as loan officers.

Despite what you have heard and seen the claims of other mortgages companies on radios and TVs, (such as "No points, No fees", which basically means higher interest rates), most of these companies pretty much have the same access to direct lenders and offer the same or similar loan programs.