When it comes to purchasing a home, most people need a mortgage. However, getting a mortgage can be a daunting task, especially if you’re a first-time buyer. This is where mortgage brokers and lenders come in. A mortgage broker is an intermediary who connects borrowers to lenders, while lenders are financial institutions that provide mortgages. In this article, we will explore the market share numbers of mortgage brokers and lenders.
What is market share?
Market share refers to the percentage of sales or revenue that a company or industry has in a particular market. In the case of mortgage brokers and lenders, market share refers to the percentage of mortgages that are originated by them.
Mortgage broker market share
According to a report by the Mortgage Bankers Association (MBA), mortgage brokers originated 14% of all mortgages in 2019. This was a decrease from 16% in 2018. However, the report also found that mortgage brokers had a higher share of the purchase market than lenders in 2019. Mortgage brokers originated 16% of all purchase mortgages, while lenders originated 84%.
Another report by Inside Mortgage Finance found that mortgage brokers originated $248 billion in mortgages in 2019. This was an increase from $225 billion in 2018. The report also found that the top five mortgage broker firms had a market share of 54.1% in 2019.
Lender market share
The same MBA report found that lenders originated 86% of all mortgages in 2019. This was an increase from 84% in 2018. The report also found that lenders had a lower share of the purchase market than brokers in 2019. Lenders originated 84% of all purchase mortgages, while brokers originated 16%.
The Inside Mortgage Finance report found that lenders originated $1.7 trillion in mortgages in 2019. This was an increase from $1.6 trillion in 2018. The report also found that the top five lender firms had a market share of 53.5% in 2019.
Mortgage broker vs. lender market share
Based on the above reports, it’s clear that lenders have a higher market share than mortgage brokers. However, it’s important to note that mortgage brokers still play a significant role in the mortgage industry, especially in the purchase market.
One reason for this is that mortgage brokers can offer borrowers more options than lenders. Mortgage brokers work with multiple lenders, which means they can shop around for the best rates and terms for their clients. Lenders, on the other hand, only offer their own products.
Another reason is that mortgage brokers can help borrowers who have unique circumstances. For example, if a borrower has a low credit score or is self-employed, they may have a harder time getting approved for a mortgage with a lender. A mortgage broker can help these borrowers find a lender who is willing to work with them.
Conclusion
In conclusion, while lenders have a higher market share than mortgage brokers, both play important roles in the mortgage industry. Mortgage brokers can offer borrowers more options and help those with unique circumstances, while lenders offer their own products and can be more convenient for some borrowers. As a borrower, it’s important to weigh the pros and cons of working with a mortgage broker vs. a lender to determine which option is best for you.