The 7 Sins Of Mortgage Brokers - part 1
by Chris Suffern
Honesty is the most important aspect of dealing with mortgage brokers. Unfortunately not all brokers are forth coming with certain information that would allow you to trust them and make an informed decision about the deal they recommend. Don't get me wrong not all mortgage brokers are bad. Just don't underestimate the influence that commission has on their recommendations. And, as always there are bad eggs in every industry.
Being aware of the following broker sins will help you pick a trustworthy broker and make sure they get the best deal for you. Most importantly, don't be afraid to ask questions.
Sin 1: Favouring their loan product. You need to be aware if the mortgage broker is also a lender, i.e. do they have their own loan products? If they do, and they offer there own product, there needs to be a clear, understandable reason why their product is the best choice for your situation.
Sin 2: Being influenced by commission. Brokers get commission from the lender you end up borrowing from. You need to ask if the broker has special incentives for referring you to a specific lender i.e., do some lenders pay more commission? If so, this may lead them to be biased about which lender they recommend to you. They may be inclined to recommend you to the lender that pays the most; regardless of whether this is the best choice for you.
So again you need to be given a clear and understandable reason why the product and lender is the best choice for your situation. You also need to find out how big a range of lenders the broker deals with. They can't claim to find you the best loan product on the market for your needs if they only deal with 20% of lenders on the market.
Sin 3: Hiding the real cost of the mortgage. Make sure the broker provides you with the comparison interest rate, when looking at or comparing any home loan products. The comparison rate shows you the real cost of a home loan by taking into consideration all the foreseeable fees and charges associated with the loan. This is so you can easily compare home loan products.
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The 7 Sins Of Mortgage Brokers
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