There is no question that there are dishonest mortgage brokers. Mortgage brokers are required to be licensed in the State they work; however, it is not difficult to get a mortgage broker license. Mortgage brokers are independent sales people that sell mortgages. They work on a commission basis for referring your business to the mortgage lender. With any middleman there are fees for their services. There are several instances where using a mortgage broker could be beneficial to you. If you do not have the time or desire to research lenders and their mortgage products a good broker could do it for you; however, mortgage brokers dont always have your best interests at heart as they are paid on a commission basis. Another situation where a mortgage broker could help you is if you have bad credit. If you have a poor credit rating, mortgage brokers can find lenders that specialize in bad credit mortgages. These bad credit lenders are called sub prime mortgage lenders and a good broker can find you a better deal with one of these lenders. To their credit mortgage brokers have relationships with a variety of mortgage lenders and can find deals you would not know about otherwise. The problem with a mortgage broker is they want to get paid for their services. There is nothing wrong with that; however, greedy mortgage brokers often take advantage of the trust people place in them. If you decide to use a mortgage broker you should shop for a broker just like you would shop for a new car or kitchen appliance. Call a variety of mortgage brokers and compare their fees; ask each mortgage broker for references and make sure you get everything they promise you in writing. By shopping from a variety of mortgage brokers you will be able to determine what a fair price for the service is. Pay very close attention to all of the fine print your mortgage broker gives you. Make sure all of your personal information is accurate and the lender and broker have disclosed all fees and who they are going to. If the broker wants to charge a fee for guaranteeing an interest rate, find out if this is really what the fee is for. Many brokers simply pocket the fee when the lender is guaranteeing your interest rate at no charge. You can always use a mortgage lender to get quotes from different lenders and then contact those lenders directly. There should be no fee for comparison shopping. In many cases you are better off doing the legwork yourself; if you take the time and do your homework you can be sure you are receiving the best deal for your mortgage. |
