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How to Spot a Good Mortgage Broker
from: Deb St. George - HomelessInKingCounty.comWith the FBI investigating some lending institutions and mortgage brokers, it becomes clear that most brokers do not represent anyone’s interests but their own. Mortgage brokers are regulated by state agencies but are not under any compulsion to get the buyer the best or safest deal. Brokers make money by closing deals for lenders or banks and then taking a commission or fees off the value of the loan from the lender. You may not realize that you are paying the broker, but they are getting paid. Some are getting paid by the borrower and the lender is paying others. In some cases, it was even shown that mortgage brokers might end up getting paid more if they steered clients to mortgage loans that had high prepayment penalties, making it difficult for the borrower to refinance later.
What a Broker Should Do
Mortgage brokers should assess your financial capabilities and try to find a market product that suits your present situation. The problem comes in when they are steering you to products that are risky. You also need to do your own homework in deciding whether any product offered is a good deal or not.
The broker works with a lending institution in providing the paperwork and application forms necessary to substantiate your income and ability to pay the lender. This can include all the copies of your tax returns, W-2s, and bank account statements. Be prepared to give your mortgage broker any type of document they need to apply for your loan.
What a Broker Shouldn’t Do
If you are not in a position to buy a home because of your income, steer clear of any mortgage broker that fudges the numbers. The numbers are set so that you don’t borrow above your means. Lying on a loan can have serious consequences, both legal and financial. So, if you see a discrepancy between what you stated to your mortgage loan officer and the final paperwork, speak up before you sign.
If you are in a fixed rate loan with little incentive to refinance, you may still get brokers who call trying to sell you all the benefits of a refinance. Keep in mind that they are paid to close deals, not necessarily to make sure you get a better deal than the one you have.
The mortgage broker should also provide you with a good faith estimate and the cost of fees assessed to your loan before you close. Any paperwork that is missing or different at closing should be reviewed thoroughly before you sign.
Mortgage Rates News
Bankrate: Mortgage Rates Set 4th New Record in a Row
NEW YORK, May 16, 2012 /PRNewswire/ -- Mortgage rates fell for the seventh time in the past eight weeks and set a new record for the fourth consecutive week. The average rate on the benchmark 30-year fixed ...
Read more...With mortgage rates so low, how to swing a refi?
As mortgage rates hit another record low, some homeowners ponder whether it's worth reaching into their savings to buy their way into the refinance craze. Others have the privilege of cashing out and reinvesting ...
Read more...Bankrate: Mortgage Rates Set 3rd New Record in a Row
NEW YORK, May 10, 2012 /PRNewswire/ -- Mortgage rates fell for a fifth consecutive week, with the average rate on the benchmark 30-year fixed mortgage rate dropping to 4.02 percent, according to Bankrate.com's ...
Read more...Rates keep dropping and refis are hopping
Mortgage rates dipped again, for the sixth week in a row, pushing the rate on the most common type of mortgage below 4 percent for the first time in the history of Bankrate's survey.
Read more...Mortgage rates hit record lows
The debt crisis in Europe is giving U.S. home buyers a boost
Read more...Mortgage Rates Increases: Wrong Questions, Wrong Answers?
Nothing excites Australians like house prices and mortgage rates . It is no surprise, therefore, that the recent decision by major banks to increase interest rates independently of the Reserve Bank of Australia (RBA) - has led to hyperventilation among consumers and politicians.
Read more...Mortgage rates still falling, hit record lows
Mortgage rates have continued to fall over the past week, setting record lows for both 30-year and 15-year contracts, mortgage giant Freddie Mac said Thursday. The 30-year benchmark now stands at 3.79 percent, down from 3.83 percent a week ago, with an average "point" fee of 0.
Read more...