It’s part of the American dream to own a home and most people accomplish this through a mortgage. A mortgage is essentially a loan a person gets in order to purchase real estate. Originally, the term “mortgage” was derived from a French legal term used in the middle ages which stood for “death pledge”, because most people who had mortgages in those days passed away before they were able to pay off the debt. In today’s world, while the name is still used, people can often pay off their loan…If they plan correctly. There are different types of mortgages to fit different needs and different situations. Most of the time, mortgages are provided by mortgage companies, otherwise known as lenders, who work with borrowers through banks or other financing avenues.
The objective of this lesson is to provide Heroes News Network sales agents with more in-depth information about mortgages and how connecting with more VA clients, can help mortgage lenders. When working with prospective mortgage lenders and brokers it is important to understand the mortgage process.
Mortgage lenders make money by closing on loans, especially successful loans. A large portion of a lender’s pay comes from commissions. They earn a percentage of the principal (loan amount before interest), on each closed deal. Some loan officers working for larger mortgage companies are paid by salary, but they do get extra benefits in the form of bonuses for closing on more low-risk mortgages than high-risk mortgages. Independent mortgage brokers earn the majority of their money through commissions from the larger lenders whom they act as the intermediary for. Overall, loan officers want to approve loans, but approving a large number of loans that end up defaulting is not a good career move (though in past years, the opposite was true). The more loans they can legitimately approve, the more money they make. With that being said, HNN can promote their business and connect them with local Veterans looking to purchase a home or refi.