Mortgage brokers coordinate with a range of lenders to find the perfect loan for your needs. They save time and effort by comparing rates from different providers on your behalf.
Brokers also collect financial documents and submit preapproval applications for borrowers. Furthermore, they provide insights into the local housing market.
They Have Access to Databases of Fraudulent Activity
Mortgage brokers have access to databases of fraudulent activity which they can use to protect you from getting taken advantage of. These records are based on reports collected by industry professionals such as mortgage lenders, real estate agents, appraisers and title examiners; in addition to more traditional databases containing credit and identity information.
Mortgage fraud primarily falls into two categories: fraud for property and fraud for profit. Fraud for property involves material misrepresentations or omissions with the purpose of deceiving a lender into providing credit that wouldn’t have been approved had all facts been revealed; examples include asset fraud, occupancy fraud and loan approval fraud.
Fraud for profit is usually perpetrated by professional criminals or employees within credit unions, banks or real estate companies who seek to embezzle funds or steal from a financial institution. It may also involve cyber-crime.
Recent surveys revealed that borrowers who apply for loans from wholesale lenders or brokers are more likely to become the victims of fraud than those seeking their own financing. This may be because those who scrutinize borrowers’ applications for funds have an incentive to cut corners.
Matt Lieberman, senior mortgage banker at Apex Home Loans in Rockville, Maryland, believes there are multiple reasons why homeowners may become victims of loan fraud. One major factor is an increase in house flipping and rental properties.
Another possible explanation is that many people attempt to obtain a lower interest rate than they qualify for. To accomplish this, some may use an unsavory scheme known as asset rental fraud. This involves depositing temporary funds into a bank account and then withdrawing them once the loan has been approved.
They Can Ask Lenders to Waive Fees
In the process of buying a home, there are various fees involved. While not all can be waived, it may be possible to negotiate the terms and conditions for some of these charges.
Mortgage brokers often assist consumers in locating lenders who will waive certain closing costs. This not only saves them money, but it makes the entire home-buying process much smoother and simpler.
When searching for a lender, it is important to review the Loan Estimate which was replaced by the Good Faith Estimate in 2011. Furthermore, inquire about any fee-waiving programs the lender provides to current customers.
John Martin, a broker at Lending Tree, recommends looking out for fees on your Loan Estimate that appear excessive or pointless. These charges usually correspond to services you don’t require, like credit check fees or courier charges, which should be avoided at all costs.
The lender should provide you with a detailed breakdown of all fees it will charge you, including those for third-party vendors such as appraisal companies, home inspection services and title search firms.
These fees can be haggled by asking the lender which vendors are mandatory and which you have freedom to select from. They may also recommend vendors with whom they have an established relationship or may even have negotiated volume discounts with these companies.
Another way to save on these fees is applying for lender credit. This can be an excellent option for cutting back on upfront expenses like discount points, origination fees and credit check fees.
You can locate these credits on a number of websites, including the Mortgage Bankers Association site.
By using a mortgage broker to find the best deal, you can save yourself time and effort. However, it’s essential that you compare lenders carefully; additionally, consider their loan-related fees such as processing and underwriting charges before determining which one works best for your needs.
Some lenders can include application and processing fees in their loan origination fee, so be sure to inquire about this. Moreover, look for lenders who will waive other costs like credit check or appraisal charges.
They Can Help You Find the Best Loan for Your Needs
Mortgage brokers assist homeowners in securing better deals by searching for the most competitive loans from various lenders. They may work with banks, credit unions and online lenders that specialize in mortgages; additionally, they collect financial documents and submit a preapproval application on behalf of the borrower.
Brokers typically hold a license in their home state and should possess knowledge of mortgage law. To prepare for the licensure exam, many take courses covering federal and state laws, ethics codes and financial regulations.
Mortgage brokers sometimes receive commissions from lenders and should be honest about their fees, according to Kimber White, president of the National Association of Mortgage Brokers (NAMB). They can help you negotiate these fees and understand how much money they’ll make on your loan, she added.
Amy Stobbe, a senior mortgage associate at Bankrate, recommends that you utilize mortgage brokers to save yourself time when purchasing or refinancing a home. They will assist you in researching different rates and loan options as well as assist with the application process and paperwork.
Another advantage of working with a mortgage broker is that they can help you avoid mistakes during the home loan process. For instance, they can steer you away from lenders who don’t offer competitive interest rates or are unable to provide certain terms and conditions.
Furthermore, they can locate a lender that meets your needs – even if your income is lower than anticipated or your credit history is less-than stellar. Furthermore, they have contacts who have more relaxed credit score requirements or specialize in lending for certain types of properties.
Finally, they can help you circumvent potential mistakes in the mortgage process, such as overpaying for your loan or agreeing to terms that don’t serve your best interests. For instance, a lender may give you an attractive rate on paper but conceal hidden fees or charges that could end up costing you significantly more money in the long run.
They Can Save You Time
When purchasing your first home, refinancing or searching for an affordable mortgage, a mortgage broker can save you both time and money. They have access to numerous loan products, so they are able to match you with the ideal one tailored towards your individual situation.
They can locate lenders who offer specific loans, such as government-backed FHA or VA mortgages. Additionally, these professionals provide guidance throughout the application process for these mortgages in order to keep your application on track.
Mortgage brokers don’t need to meet the same lender standards that banks and credit unions do, so they can do all the legwork for you in finding the perfect lender. This saves time as you won’t need to visit multiple lenders or fill out endless applications.
A mortgage broker can also assist in negotiating terms that are more advantageous to you than what the lender would have offered. This could potentially save you thousands of dollars over the course of your loan.
Mortgage brokers usually have access to a vast network of lenders, making them the perfect match for your needs. This is particularly useful if you require special financing conditions like low down payments or higher credit score requirements.
The mortgage process can be lengthy, so you’ll want to get as much assistance as possible along the way. That’s why hiring a mortgage broker who has comprehensive knowledge of this step-by-step procedure is so essential.
It’s essential to understand how a broker will be paid, so you can select one who charges fair compensation for their services. A law called the Dodd-Frank Act limits what brokers can earn and prevents them from placing their own financial interests ahead of yours.
Another advantage of hiring a mortgage broker is their access to databases of fraudulent activity which you don’t have access to on your own. They can alert you to these schemes, giving you time to take precautions and safeguard yourself against financial scams that could put your personal data at risk.