A mortgage broker sits between you and the lenders that fund home loans. You apply once, and the broker sends that application to a wholesale lender whose rules approve it at the best price available. Florida law defines a mortgage broker as a company that conducts loan originator activity through licensed loan originators, and the Office of Financial Regulation licenses both the company and each loan officer.
One application, several rulebooks
Every wholesale lender follows the FHA, VA, USDA and Conventional guidelines, and many add stricter rules of their own, called overlays. One lender may want a 640 score on FHA even though FHA allows 3.5% down at 580. Another may cap total debt at 45% when FHA's automated approval reaches 56.9%, or refuse a co-signer who won't live in the home. A bank lends from one rulebook. A broker picks among several and sends the loan where the rules already say yes.
A co-signer loan that one lender won't take
A buyer earns $4,500 a month. The house she wants carries a $2,350 payment, and her car and card payments add $500.
| Buyer alone | Buyer plus her mother as co-signer | |
|---|---|---|
| Monthly income | $4,500 | $7,500 ($4,500 + $3,000) |
| Monthly debts with the house | $2,850 | $3,450 ($2,850 + $600) |
| Total debt-to-income | 63.33% | 46.00% |
On her own, $2,850 ÷ $4,500 lands above FHA's 56.9%. With her mother added, $3,450 ÷ $7,500 comes to 46.00%, comfortably inside. On FHA the co-signer's income and debts count with the buyer's, and the co-signer stays off the title and doesn't have to live there. If the first lender in line refuses non-occupant co-signers as a house policy, the broker moves the same application to a lender that follows FHA's own rule, and the purchase goes ahead.
How a broker gets paid
Federal Regulation Z sets the rules. On any one loan, the broker is paid either by you or by the wholesale lender, never by both, and the pay can't rise or fall with your interest rate or other loan terms. Pay that comes from you shows on your Loan Estimate, and your Closing Disclosure lists the broker's pay whichever way it's paid.
What to bring a broker
The first conversation goes faster with your last 30 days of pay stubs, two years of W-2s, two months of bank statements and a list of your monthly debts. If a bank already said no, bring that letter too, because its stated reasons show which overlay stopped the loan.
AAA Capital Funding has been a Florida mortgage broker since 1997 under NMLS #374739, and we shop multiple wholesale lenders on every application. The co-signer calculator shows how a family member's income moves your ratio, and 888-601-8344 gets your numbers in front of the lenders that will approve them.