Sales Grower

The fact that the FBI is investigating some of the major lending institutions and mortgage brokers should tell you that the majority of brokers are only concerned with their own wellbeing.   Mortgage brokers are regulated by state agencies but are not under any compulsion to get the buyer the best or safest deal. Real estate investors make money by shutting a deal closed for lenders or banks afterward taking the money off the value of the agreement from the lender. You might not see how the broker is getting paid, but he is. Some of these are paying the broker and the lender is paying the 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.

Mortgage brokers should always be looking for the best market for your situation. When they start pushing risky products for you to buy, it can become a problem. You need to do your own research and decide for yourself whether this product is worth the price.

The broker and the lending institution work together in that the broker provides the lender with all of the paperwork necessary to verify income levels and financial stability.   This includes copies of your tax returns, your W-2’s and statements from your bank.   You need to be prepared with any type of paperwork that your broker will need.

You need to stay away from mortgage brokers that fudge the numbers if you feel you don’t have enough income to purchase a home. The numbers are set so that you don’t borrow above your means. Serious legal and financial consequences can occur as a result of lying on a loan. Before you sign the final papers, make sure it matches what you verified to your mortgage loan officer.

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. These people are paid to close deals, not to ensure you get the best deal.

The mortgage broker should also provide you with a good faith estimate and the cost of fees assessed to your loan before you close. Before signing anything at closing, make sure that all paperwork is correct  and unaltered, and that no papers are missing.

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