Great story about the value that Mortgage Brokers (like our sister office HP Investments, Inc ) bring to the table. One of the main differences between using a Mortgage Broker and using a bank is that the YSP, or Yield Spread Premium, that is paid on a loan belongs to the borrower when using a mortgage broker. Mortgage Brokers use the YSP to pay borrowers' closing costs and if there is extra YSP after paying closing costs, to reduce the principal balance on the borrowers loan. When a borrower uses a bank the premium, called SRP (Service Release Premimum) is not disclosed on the HUD-1 (settlement statement) and is paid to the bank, not the borrower.
Another huge reason to use a Mortgage Broker is that they are usually approved with many lenders and can deliver the best rate at the time to the borrower. HP Investments, Inc uses a tool called Loansifter to compare all of their approved lenders on every loan scenario run, so that they can deliver the best interest rate available at the time to their clients.
Click Here to see the NAMB (National Association of Mortgage Brokers) Governmental Affairs story by Kenneth R. Harney about how Mortgage Brokers use YSP to credit their clients