Tips on Choosing a Mortgage Broker
February 17, 2009 by admin
Filed under mortgages, News, real estate info
According to statistical data, it is believed that the greed of mortgage brokers created the foreclosure crisis. The reason mortgage brokers are being blamed for the mortgage crisis stems from the incentives offered to them to be advocates for “toxic loans and yield spread premium.” In other words, greed is the callous for the epidemic that is plaguing and adversely affecting every American.
A way to combat this epidemic of toxic loans, is to hire an upfront mortgage broker. An upfront broker has an agreement that entitles the broker to only one to two percent of the loan amount as their broker’s fee. The broker receives this amount regardless of the terms of your mortgage.
Even HUD recognize that yield spread premium may have been the reason for this epidemic, so HUD is making changes to the settlement statement or HUD-1 over the next year that would make it easier for the consumer to see the hidden cost and yield spread premium.
According to the National Association of Mortgage Brokers, the only fees that you should be paying upfront are for an appraisal and credit report.
It is equally important to understand the mortgage that you are getting. Ask the broker the pros and cons of the mortgage being offered. Ask about the rate adjustment if you choice an adjustable rate mortgage. Ask what your new payment will be if the rate adjust? Ask how high the rate will adjust and what will that payment be? Check to make sure that the loan disclosure or good faith estimate matches what the mortgage broker told you.
Amerisave is a company that offers upfront fees and even gives a $1000 guarantee to close as promise. Get a 30 year fixed mortgage at 4.25%. Click on Amerisave link to check it out for yourself.
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Good post. Don’t forget to look at how the world of public relations is changing and evolving. Social media and other online outlets are bringing the customer closer to the business.
Very timely data regarding mortgages and what to expect. Thanks for the info. Many people have similar situations in their lives.
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