Even veteran mortgage brokers agree that it is important nowadays for people who want to get mortgages and loans through brokers to get good ones : ) Most brokers who have been in the business twenty to forty years ago admit that the mortgage and loan scene at present times is far different from the one twenty to forty years ago.
Before, traditional mortgages come in fixed rate packages with the same price and the same length of paying period. Now, it’s different, they have a new system called the hybrid adjustable rate loan. This is a fixed rate loan for anywhere from 3 to 5 years – then becomes an adjustable rate loan. However it may only increase or decrease by one (1) percent each year which isn’t all that bad.
For instance, if your rate was at 7.0% and the next year rates went up to 9.0% your mortgage rate would only go up to an 8.0%. Now if rates went down to a 6.0% of course you would get the lower rate without having to refinance again.
Leonard Wineburgh, a broker and president of Chicago-based Dwinn Shaffer & Co tells us why things are so different in the mortgage sene now compaired to twenty to forty years ago.
Interviewed in a recent article in the National Real Estate Investor, he said that there were no prepayment penalties before because these weren’t existing yet. Aside from this, he claims that there were only a handful of lenders to work with and searching for a loan was not as complex as it is now.
He also noted that loans today have different kinds of provisions that a mortgage broker must work with aside from documents such as appraisals, guidelines from Environment Protection Agency, engineering reports and other paper works that weren’t available years ago. He said that the loan business is very sophisticated nowadays.
Sophisticated and always changing, yes. Loan companies keep on churning out packages and programs that offer several options and choices in mortgages. Which is a good reason why borrowers should seek a good mortgage broker.
Another reason why a borrower needs a good mortgage broker is to spare him from headaches and other expenses. With work and families taking up our time, it’s difficult to keep up with interests and rates that change as frequently as the weather aside from keeping track of lenders that could offer us the lowest and best deals.
These two facts are the reasons why a mortgage broker comes in. A mortgage broker could find the lowest rates easily for their clients with their access to numerous lending contacts. Aside from this, they can negotiate provisions that could be bothersome for us to do personally and find stop-gap financing should a traditional loan comes up with some problems. A mortgage broker can also ensure that the closing for the loan or mortgage comes on schedule following the contract.
But, before getting a mortgage broker, it is important to remember that any broker is not necessarily a good broker. Some deals can either make or break depending on the broker you choose. Here are some guidelines that can help you decide the broker who is right for you:
* The mortgage broker must be affiliated to many lending institutions and should be licensed.
* The mortgage broker should be working at a reputable institution. The name of the company could be checked at the Better Business Bureau or the Chamber of Commerce.
* The mortgage broker should provide you with the names and contact numbers of people who can be contacted for credibility check.
* The mortgage broker should ask you what you want on your loan. He must ask you questions rather than on giving you lots of facts. He should prioritize what you need and should come up with ways to fit this with various deals available in the industry.
* The mortgage broker should have with him various lists of deals that he can offer. This is a good quality because if not, you might not get the best deal to fit your needs.
* The mortgage broker should be knowledgeable and competent with everything that concerns a mortgage or a loan.
* The mortgage broker should be paid on commission which will make him or her work harder for you.
* It is recommended that the mortgage broker should have a local branch near you for it to be accessible should there be any problems with your loan.
If you find a mortgage broker who has all these qualities, then you need not worry. You will be in safe hands while dealing with your mortgage.
About the Author: Guy deLaunay worked for Mortgage Investors Corporation for over 10 years and is quite knowledgeable in that industry. Also, Guy is the webmaster for ‘Five-Eight Productions’ which operates several sites including: http://www.Advertise-with.us – A membership site for work from home entrepreneurs with hundreds of resources and master resell rights.