According to the NAMB (National Association of Mortgage Brokers), two out of three Americans work with a mortgage broker to purchase a home because of the broker’s expertise and wide selection of loan products and lenders. However, with so many so called experts out there, how does one separate the wheat from the chaff? How do you know if a broker is honest? And how do you know they’re an expert or not?
Brokers Are Legitimate
The NAMB says that over 70 percent of brokers are legitimate, that is they have safeguards and policies in place to make sure that they stay on the straight and narrow. So what about the other 30 percent? Well, the whole 30 percent isn’t bad, but just as in any classroom, you’re going to have those at the top, some in the middle, a few at the bottom, and others who simply don’t show for class. Obviously, those at the bottom and the no shows would not be your first choice if you were going into surgery and they were holding the scapel, nor should they be handling your loan when you purchase a home or refinance.
Numbers of Mortgage Brokers
Because of the surge in numbers of mortgage brokers in the past few years, there are plenty of incompetent and dishonest brokers out there. In order to avoid the 30 percentile, I offer the following tips to help you find a mortgage broker that is not only an expert but honest and reputable as well:
Asking Friends or Family
1. Don’t believe everything you hear. Asking friends or family to recommend a mortgage professional is usually the first place people start. However, how do they know the broker is reputable and trustworthy? Check with your state regulatory offices and licensing bureau once you have some referrals. Better to be safe than sorry.
2. Use an NAMB certified mortgage broker. Brokers certified by the NAMB practice the highest ethical and professional standards in the industry. There is a Find a Broker.
3. Use an Upfront Mortgage Broker (UMB). These brokers disclose their fees to customers in writing in advance at the customer’s request. They also disclose the wholesale prices they receive from lenders.
4. Honesty is the best policy. If a mortgage broker suggests that you lie on your loan application in any way, he/she is most likely in the 30 percentile. Walk away.
5. They need to show you the money. If a mortgage broker doesn’t disclose your closing costs in three business days, it’s probably best to take your business elsewhere.
6. If you’re not bleeding, they shouldn’t be applying pressure. A mortgage broker who pressures you into anything you are not comfortable with probably failed ethics. No reputable broker will pressure you into anything you don’t feel comfortable with.
7. There are no stupid questions. Does the mortgage broker answer all your questions to your satisfaction? Are his/her answers straightforward, honest, and respectful?
8. Do you have a reservation? If you feel comfortable with whom you’re working with and feel like they have answered all your questions and put all your reservations to ease, you’ve probably found a good mortgage broker.
Mortgage Essentials: a Few Facts About Mortgage Loans
A mortgage can be regarded as a type of loan which is guaranteed by the property purchased by an individual. A typical mortgage deal is based on the opportunity of the lender (the party providing the money for a home purchase) to sell the house in case the debtor is unable to pay off his mortgage loan. Basically, a mortgage can be viewed as a housing loan, which is probably the fastest way to buy a house nowadays.
Different financial institutions can act as mortgage lenders. Shopping for a home mortgage loan you should consider the following options on your way:
- Banks
- building societies
- home mortgage companies
- credit unions
- state pension unions
- housing societies
- insurance companies
Also there are a number of certified mortgage lenders which are called private mortgage lenders. It’s quite obvious that there are many different sources for initiating a mortgage loan. Quite a lot of mortgage lending companies have established strong presence online. Many mortgage lenders succeed in their business arranging online mortgage deals because such an approach is fast, efficient and well secured.
Different Types of Mortgage
There exist different types of mortgage loans on the contemporary market. Different mortgage packages are offered by different mortgage lending institutions. And quite often, terms and conditions differ a lot.
Obtaining a mortgage loan the buyer should choose between either a fixed mortgage rate or variable mortgage rate and some other hybrid mortgage solutions combining the features of the two principal mortgage types. A particular mortgage loan affects regular mortgage payments, loan interest rate and overall mortgage costs. A good mortgage company provides customers with many different options in order to give people the flexibility they need. Before deciding in favor of a particular mortgage lender one should carefully review all mortgage opportunities, study available mortgage plans and packages in order to make the right decision. A casual approach to choosing a mortgage loan can result in a great loss of funds due to high mortgage payments and unexpected raise of the mortgage rates.
Costs and Fees Associated
There are quite a lot of costs and fees associated with a mortgage deal. Costs can vary from lender to lender and many of them are negotiable. The most common mortgage fees are an appraisal fee, mortgage insurance fee, application fee, early repayment and a number of others. Let an experienced lawyer or mortgage broker handle your mortgage deal that will help a lot.