Not everyone who calls himself a mortgage broker is to be taken at face value. You have to “do your homework” in order to define right from wrong, true from false. At times you might meet someone who is encouraging and helpful, but there are those who use congeniality with a hidden motive. What you will find below are helpful tips to learn who are the right people to deal with in the mortgage business:
Be Educated in Mortgage Brokerage
Unless you want a career in such, you do not have to go to college or take the mortgage brokerage course to understand the ins and outs of the business. Just know the primary roles of a mortgage broker and what it takes to find a really good one. A good broker has the following qualifications, responsibilities, and obligations to you:
Qualifications of a Mortgage Broker:
- Has at least a high school education or equivalent in mortgage and real estate courses.
- Has gained enough experience either as a loan officer or in real estate.
- Has a license and certification to work in the city where you are.
- Must possess excellent mathematic skills and a thorough knowledge of mortgage practices.
- Has excellent communication and organization skills.
Responsibilities and Obligations:
- Honest enough to mention what his payment terms are. This is usually a percentage from the total loan.
- Will inform you of all costs associated with the loan and any additional basic costs which will be incurred.
- Will not lie on your behalf just so you can get a loan.
- Will get special rates from his network of lenders and institutions for better terms and options.
- Will give you regular update of information of his whereabouts and progress.
- Will discuss the matter with you thoroughly and will oversee the processing of loan or finance documents until the end of the deal.
Much to everyone’s dismay, there are brokers who take advantage of customers unwittingly. Here are some red flags to consider before hiring a broker:
- Not taking into account your ability to pay. If your mortgage payment becomes higher than 28% of your gross monthly income, the broker must be quick to question this.
- Will encourage you to purchase points to lower interest rates. Do not agree to any loan if the interest rate goes above 5%.
- Prepayment penalties. If charges reach 5% or more, that is a scam.
- Balloon payments in investment properties must be qualified if this is right for you.
You always have the option to do everything yourself but you have to be ready physically, mentally, and intellectually. There is a big difference between doing the work yourself and leaving it all to the experts (of course, with regular updates to you)! If you go your own way, contact at least three lenders; don’t automatically take the first loan offer.
Now that you know what a mortgage broker is, what he does for a living, and how he can assist you in your loan application, sale of property, or in financing your new home, you can understand even better the complexity of the business with the help of mortgage advice from professionals who have something better in store for you. Just in case you find yourself trapped with a bad mortgage broker, fire him soon and find someone else. There are better and more experienced mortgage brokers out there. Find your own now.