A lot of people don’t trust mortgage brokers. Considering the number of people who have been taken advantage of by mortgage brokers over the years, it’s no wonder why a lot of people feel this way.
On the other hand, not all mortgage brokers are out to take advantage of you. There are still a lot of good brokers around who are bent on doing a great job of finding you the best mortgage deal.
Understanding the mortgage process can be the best way to prepare yourself for the home buying process and ensuring you are not a victim of a scam. Though the process can be tricky, researching the steps and becoming knowledgeable of the process can be your best defense.
The most important thing to understand is the fees that are associated with the mortgage process. A mortgage broker gets paid for their work by closing your loan; therefore, the broker doesn’t get paid until you have completed the mortgage process and closed on the loan. They receive either an origination fee or a lender fee and your closing documents will note the fees and what they are.
The origination fee is a fee for brokerage services provided on the actual loan. This fee is not fixed so you will want to ask your broker what their fee will be so you are not surprised. It should be noted that, though the fees vary from broker to broker, a fee that exceeds one percent of the loan amount is generally indicative of you being overcharged.
The lender fee is a fee that is paid by your lender to have your mortgage rate increased. This means that you will be paying a much higher monthly payment.
This fee paid by the lender to the mortgage broker is known as the yield spread premium. While there is nothing wrong with this concept, what irritates a lot of people is the fact that there are different disclosure requirements about it. If you can’t find a broker who can avoid it, you need to find a broker who will at least tell you about it.
The best choice in matters of mortgage brokers is the self-employed brokers. They don’t have any overhead and other publicity costs and they will sure get you the best deal.
The individual has been writing on mortgage brokers for the previous seven years. Moreover, the writer likes providing knowledge about NYC neighborhood topics, like Prospect Park homes for sale in addition to Windsor Terrace rentals.