What You Should Know Before Consulting Mortgage Brokers
When it is time to buy a new home, mortgage brokers may be able to help you find a lending institution that is able to loan you the needed money
. A mortgage broker does not actually lend money, but they do have access to several banks and other lenders that can make the mortgage. Once he looks at your financial situation, a good broker can recommend the best institution that will qualify you for a loan.
You will find brokers in most of the countries where the mortgage market is well developed, but especially in the United States, Canada, the United Kingdom, Australia, Spain and New Zealand. The broker will work with you to find a lender. Brokers charge a fee for their services, typically between one and three percent.
Over two-thirds of all home loans sold in the United States are serviced by brokers. The broker is subject to rules in order to be licensed in most states. If a broker misleads a customer the broker can be subject to penalties and may lose their right to be a broker.
Brokers differ from lending officers. Lending officers are employed by a particular bank. Brokers are not. Lending officers can only offer products sold by their individual bank while brokers offer products from several different banks.
The law requires that the fee a broker charges plus the interest rate not exceed a certain percentage or the loan is considered a high interest loan. This means that if the interest on a mortgage is high the broker must lower his fee to stay under the limit. This law can protect consumers who might otherwise pay a very large cost for a mortgage.
Working with mortgage brokers may help you to finally be able to purchase the home of your dreams. Remember that the broker does not work for the bank, but can represent several banks. Brokers must work under certain laws and can lose their license for fraud.
by: Mike Johnson.
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