How Not To Be Ripped Off By Mortgage Brokers

One of the things that bothers me about the mortgage industry is the number of unscrupulous brokers that operate in this market.

Talk about giving the industry a bad name!

I worked for a mortgage lender until quite recently and I used to be shocked at the fees that brokers charged their clients. I mean lets put this whole "mortgage arranging" thing into perspective.

Assume I am meeting a client today. The guy walks into my office and sits down and has a chat with me about getting a mortgage.

It appears that he is not a "clean" client as he is suffering from a few credit problems. Well, I stroke my chin and let out a couple of sighs but wait, I CAN HELP HIM.

I tell the client that it is going to be difficult but I think I can help him. There may be a few "fees" but hey, at least he is going to get a mortgage and that is all he cares about isn't it?

So, he needs to borrow £150k. Because of ALL the work I am going to have do I am going to charge him a competitive fee of 3% of the loan amount. That's right, £4,500!.

But, he does have credit problems and he is going to get a mortgage and that is all he cares about right?

Oh, and the £4,500 doesn't have to be paid upfront because all we will do is add it onto the loan amount. So that's ok ,right?

NO,NO,NO.

Ok I am talking about a hypothetical situation but this is one that is repeated everyday throughout the UK. In my opinion it is nothing more than robbery and shows scant regard for the clients wellbeing.

How can anyone justify charging that to a client that will already have to pay a higher interest rate than a clean client would.

So, to recap, the £150k loan now becomes £154,500 and that is before you even get to the solicitor and arrangement fees, let alone the Mortgage Indemnity Premium (MIG.

So, the rule of thumb here is a simple one.

Ask your broker to justify their fees and if you find anyone charging a fee of more than 1%, walk away. Quickly.

Mark Anthony Harrison has worked in the Financial Services sector for over 16 years, many of them spent working for a mortgage lender and more recently with his own mortgage and finance brokerage. Visit him at http://www.capitalmortgagesolutions.co.uk


When Not To Agree To A Home Equity Loan

Before you borrow money on your home's equity, think twice... Read More

Buying a Home With Bad Credit - Get Approved With a Recent Bankruptcy or Foreclosure

A few years ago, if you had a bankruptcy or... Read More

Bankruptcy and Buying a Home

Filing bankruptcy is a stressful time in a person's life.... Read More

Jumbo Mortgage Loans - Getting Approved for a Jumbo Mortgage Loan Online

Getting approved for a jumbo mortgage loan online is similar... Read More

Thinking About Re-mortaging? Read These Tips First

More and more of use are signing up for limited... Read More

Buying a Home when Rates go Up

Many people fret the rising tide of interest rates. You'll... Read More

The Top 5 Things You Must Know Before Applying for a Mortgage

You've been thinking about buying your own home for quite... Read More

Basic Tips for First Time Home Buyers

The first time you purchase a home is an exciting... Read More

Home Equity Loan ? When Does Refinancing Make Sense?

For the last two years, interest rates have been much... Read More

Mortgage Advice To Make Mortgages A Really Smooth Ride

Mortgages are easy as long as you understand them well.... Read More

A Guide to Finding the Cheapest Home Improvement Loan

To find the cheapest home improvement loan that you can,... Read More

Home Equity Loans ? Research Your Lender Carefully

Real estate prices are rising across the country, and Americans... Read More

Buying A Home After Bankruptcy - Get A Mortgage Loan After Bankruptcy

If you have a recent bankruptcy on your credit and... Read More

Bad Credit Loans Authenticate What Is Positive About Bad Credit

This might not be the front page news but it... Read More

Real Estate Tip: Escrow Accounts -- Do You Really Need Them?

If you have a mortgage on your property, whether it's... Read More

Know Your Mortgage Options

While trying to find the lowest rates, many homeowners fail... Read More

How To Get The Best Home Equity Loan

Are you wondering how to get the best Home Equity... Read More

Where To Find The Best Rates For Your Mortgage?

As with all of my articles this will be based... Read More

Why Refinance Back into a 30-Year Loan?

One of the biggest reasons homeowners refinance their mortgage is... Read More

How to Avoid Paying Mortgage Insurance

In today's world, a borrower should not be paying mortgage... Read More

Mortgage After Bankruptcy

Most people probably assume that obtaining a mortgage to purchase... Read More

Private Mortgage Insurance (PMI)

If your down payment on a home is less than... Read More

Home Equity Lines of Credit - the Basics

A Home equity line of credit is a loan which... Read More

Reverse Mortgage Maximization

Have your home's appreciation grow twice as fast.For Seniors over... Read More

Home Equity ? Is it Time to Cash Out and Move?

During the last five years, home prices have increased nationwide.... Read More