The 7 Sins Of Mortgage Brokers - part 2

by Chris Suffern

Sin 4: Withholding information. Know the whole deal. You need to know the whole service provided by the broker. Do they provide ongoing service and assistance after you secure your loan? If so, find out for how long. Also, what are the fees involved? Theirs and the lenders. All this needs to be made clear before any papers are signed.

Sin 5: Allowing client ignorance. Make sure you understand what the benefits and the drawbacks are for you. You need to have it explained to you in a clear way so you can understand it. This is so you can weigh it up and decided for yourself if refinancing is actually in your best interest. There is a bad practise in the mortgage broker industry called churning. Churning is the act of refinancing for the sake of commission even though there are no benefits for the mortgage owner. Making sure you understand the benefits and drawbacks of the refinancing deal yourself will make it impossible for you to fall victim to this practice.

Sin 6: Being Uninsured Do the brokers have their own professional indemnity insurance? This protects professionals against liability claims resulting from negligent work. All lenders will have it. However the brokers should not assume they are covered by the insurance of an umbrella organization. The broker needs to know for sure if they are or are not protected.

Sin 7: Being Unqualified. Is the broker qualified to give you lending advice? In every country there are reputable authority organizations that provide mortgage brokers with credentials, provided they undertake certain courses. Find out who these organizations are and make sure the broker you're dealing with is a member or has been given credentials.

Copyright (c) Chris Suffern

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