Maryland Home Improvement PSI Practice Exam

In helping a buyer to select a lender, which reason is NOT a consideration when recommending a mortgage banker over a mortgage broker?

1. Closing costs may be lower.

2. Loan originator has knowledge of underwriter's policies.

3. More variety of loan programs available.

4. Originator and lender are part of the same company.

The correct answer is: More variety of loan programs available.

When recommending a mortgage banker over a mortgage broker, it's essential to recognize the distinctions in services and structure between these two types of lenders. The correct answer highlights that "more variety of loan programs available" is not a typical reason to favor a mortgage banker. Typically, mortgage brokers work with multiple lenders and can provide a broader selection of loan products. In contrast, mortgage bankers primarily offer products from the lending institution they represent, which may limit the variety they can present to the client. The other considerations mentioned, such as lower closing costs, knowledge of underwriter's policies, and the fact that the originator and lender are part of the same company, are valid reasons why someone might choose a mortgage banker. These qualities can result in a more streamlined process, more tailored options, and increased efficiency in loan processing.