Trusting a Mortgage Broker
Why go to a Mortgage Broker?
A mortgage broker is an intermediary who arranges a mortgage loan for you, the borrower, with the lender that best meets your needs. A good mortgage broker has a unique niche allowing the borrower to benefit in the following ways:
- Knowledgeable Advocate by Your Side
A mortgage broker is an expert in the mortgage business who is on your side looking out for your best interests. Since a broker is not an agent of the bank, he/she has true insight into strengths and weaknesses of each program and can educate you in order to facilitate a right decision.
A mortgage broker has the expertise to survey the available programs in the market. He/she also has the most current information on various offers and changes in rates as they occur in real time. Access to this information only helps to ensure that you get the best deal at the lowest cost.
- Better Rates
A mortgage broker offers a better rate since they are able to secure wholesale options which can be lower than the retail ones.
- Favorable Results
A mortgage broker is trained to present your application to a lender in a professional manner which gets the most immediate and positive results the first time around.
- Issue Resolver
In situations with credit issues a mortgage broker can help to address any problem areas and strengthen the overall application before the lender reviews the final version. This step may facilitate an improvement in FICO scores resulting in a better rate for your loan.
- Proactive Manager
A mortgage broker will proactively manage the transaction to ensure that you remain updated with the progress of your application from preapproval to closing.
Why go to a mortgage broker after the credit crisis?
In the past, some mortgage broker practices have been questionable, and like you, we hold our peers accountable.
However the responsibility of the crisis that started with the mortgage meltdown rests equally on the shoulders of three other entities:
- The wholesale lenders that pushed to sell sub-prime products and are no longer in business today
- The Wall Street firms that bundled the mortgages into attractive investments and were later compelled to shut down or merge with other firms
- The regulators who lost sight of the risks involved with the infamous loan products that were on the market, which resulted in a disastrous impact on an average consumer (via high margins; no cap on first rate adjustment; payment options that resulted in negative amortization; and hefty prepayment penalties)
Today the government has established many new regulations to closely monitor the mortgage lending business in order to protect you, the consumer. As individuals who have consistently remained within compliance and never originated a single subprime loan, we are grateful for the government’s involvement and also hopeful that reliable and trustworthy mortgage brokers will continue to service clients with their unique market position.