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Mortgage Brokers

Using a mortgage broker to find a mortgage that best suits your situation can save you time, effort and money. A mortgage broker is a middleman who understands the market. The broker will consider your needs and qualifications, then find the best match. While many lending institutions have loan officers, these people are limited to offering only their employer’s mortgage deals. In today’s world of outsourcing, banks and other lending institutions use brokers extensively to attract and close more deals.

An excellent strategy involves seeking a pre-approved mortgage. This is when a potential homebuyer uses a mortgage broker to establish a mortgage source and amount before shopping for a home. A price range has been established by the homebuyer’s personal qualifications so closing will be faster and easier.

Mortgage brokers may prove to be a person’s only recourse. A homebuyer with bad credit, poor income-to-debt ratio or who seeks a loan for a less traditional manufactured home may not be able to find a local lender. The mortgage broker will seek nationwide for a lender, and may even have sources of private financing.

Many mortgage brokers are certified, much like financial planners and accountants, and adhere to a strict code of ethics. Questionable - though sometimes legal - behavior on a mortgage broker’s part may include charging the applicant even when a mortgage deal is not closed, entering “estimated” figures on an application form to improve your chances of obtaining a mortgage, encouraging a borrower to refinance a loan without proving the benefits in writing, encouraging borrowing more than what you need or can afford, or failing to reveal their commission - often in the form of a cash rebate called the yield spread premium - before the deal is closed. All brokers must provide a Truth in Lending statement, Good Faith Estimate and RESPA Special Information Booklet before any documents are signed.