There is a stereotype pervasive in the financial world that middlemen provide no benefit to either borrowers or lenders and do nothing more than stand in between the two parties in order to siphon money off the transaction for themselves.
Let’s examine this accusation shall we?
First, I think it’s safe to say that if brokers did not provide an essential function, they would not survive for long. That is the nature of business. Of course that leads us to the inevitable question, “what is the essential function that brokers provide?”
Like all businesses, lenders have a target market and a niche. In other words…they specialize. A good broker will have relationships with a variety of different lenders…each having their own niche. This broker will be able to pair you up with the lender that is the best match for your transaction. As a borrower, if you were to go direct to a lender who really wasn’t a fit for you, you will wind up paying more money than you should. Had you gone to a lender who specializes in providing financing for the type of transaction you are trying to do, you would have received more favorable terms. Continue reading ‘Brokers and Middlemen – Fact & Fiction’ »