The future of the independent mortgage broker channel

3 things that the future holds


Currently, one in five, or roughly 20%, of consumers work with an independent mortgage broker. With their strong, personal relationships, endless loan options and access to technology, we expect that number to continue to grow as more and more consumers become educated on the value brokers add to the home-buying experience.

This past year and a half brought on challenges we never saw coming. And as things return back to normal, we’re now looking forward to the next chapter and what is to come in the industry. The special thing about the broker channel is that it’s set up to succeed in any market, especially a purchase market.

We also can’t ignore that the market is more competitive than ever before with limited inventory coupled with low rates. As we head into the final quarter of the year, let’s dig into what we believe the future holds for the wholesale and broker channels.

1. The market will normalize

Rates will continue to fluctuate — that’s simply the nature of the mortgage business. But there are a couple of things to keep in mind. First, refinances won’t necessarily end if rates increase. They’ll simply slow down. Second, when purchase loans increase, mortgage brokers win.

Let’s tackle the refinance surge first. After over a year of historically low rates and record production volume in 2020, refinances may be slowing down, but they’re not going away. With the average mortgage rate currently in the low 3’s, there’s still a significant amount of borrowers who have loans locked in at rates in the 4’s or 5’s, meaning they are still eligible for a refinance. Other borrowers may want a cash-out refinance or may be looking for options to consolidate other high-interest debt. In other words, the opportunities for refinances are still there.

Additionally, people are buying homes at an astonishing rate, which is encouraging to see because when this happens, mortgage brokers dominate. Borrowers want the best rate possible for their financial situation and are eager to close on their home quickly. 

We also know there’s concern over the lack of inventory in the current market. We anticipate that more homes will make their way back to the market, especially as forbearance programs that were put into place during the pandemic come to an end. We’re predicting that by the end of this year, or early 2022, we’ll begin to see a normalized inventory.

2. Technology will continue to evolve

These days, almost everything we do can be done in the palm of our hands. As the world becomes more and more digital, so does the mortgage process. Because lenders are committed to developing top-of-the-line technology for the wholesale channel, brokers are getting access to state-of-the-art, digital tools that allow them to move through the entire life of a loan completely paperless, further creating efficiency and ease for everyone involved.

If I’ve learned anything during my time in the industry, it’s that speed matters, and that has become more apparent over the past year. Borrowers want to get into their homes as quickly as possible, sellers want to have a hassle-free experience selling their homes, and when it comes to refinances, consumers want to get their new rate locked in as quickly as possible to start immediately start taking advantage of the savings. This means we’re going to continue to see mortgage companies put a strong emphasis on their technology so they can keep up with the speed and demand needed to be successful in this industry.

3. Consumer education will become a priority

There is some work to do when it comes to overall consumer awareness of an independent mortgage broker. Large banks and retail lenders dominate the advertising industry, so consumers may not know to search for an independent mortgage broker. 

The good news is that independent mortgage brokers have a leg up in areas where large banks and retail lenders don’t. For example, when it comes to local community involvement, mortgage brokers dominate. As a member of the local community themselves, they have knowledge and connections in the market that large retail banks and lenders likely don’t have. This allows brokers to connect with clients on a more personal level, further creating a strong sense of credibility and trust.

Additionally, independent mortgage brokers work closely with local real estate agents, which can result in more opportunities for referrals. The more brokers impress borrowers, real estate agents and others throughout the process, the more consumers will realize the opportunities of getting a loan through them.

The mortgage broker channel is set up for tremendous success and growth. Together, we will continue to educate consumers about these benefits, and in return, watch the channel continue to dominate and grow. 

Melinda Wilner is the chief operating officer at United Wholesale Mortgage.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

This commentary was originally featured in the September issue of HousingWire Magazine. To read the full issue, go here.

To view past issues of HousingWire Magazine, go here.

To contact the editor responsible for this story:

Brena Nath at [email protected].

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