What a difference a burst bubble can make. Only two years ago, mortgage brokers originated more than two-thirds of new loans, according to Wholesale Access, a mortgage research firm. Now their share of the mortgage pie has dropped to 45%.
That's a shocking loss of market share when you consider that brokers were supposedly a boon to borrowers. Because they don't work for any one bank, they can (supposedly) shop dozens of lenders on your behalf to get the best loan at the lowest price.
But they seldom did. Instead, many of these mortgage brokers pocketed kickbacks from banks in return for selling borrowers unnecessarily costly loans.
An April study by the Center for Responsible Lending, a nonprofit organization working to eliminate abusive lending practices, found that among borrowers with credit scores of 640 or less, those who used brokers paid an average of $5,222 more in the first four years of their mortgage than those who borrowed directly from a bank. Borrowers with credit scores of 640 to 720 paid $1,316 more.
If shopping for a mortgage, and you want to use a mortgage broker instead of going directly to a bank, demand that your lending middleman set his fee in advance - not just what you will pay but also what he will get from the bank, which affects your rate. His or her total fees should not exceed 2% of the loan.
Have you used a mortgage broker before? Do you feel you were treated fairly? Leave us your comment -- we'd love to hear your experiences.
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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.
We don’t take any seller listings (yet we have more homes for you to see than most agents) and never have any potential conflict of interest like other agents who also represent sellers. We represent buyers only, 100% of the time. We can show you more homes for sale because we have access to MLS, FSBOs, Exclusives (homes that agents try to keep secret), foreclosures and homes not on the market that may be of interest to you.
We are not your traditional real estate agent. Our goal is to advise and protect home buyers and help them obtain the lowest price and best terms on their dream home. Call us at 516-887-6901 to see how we can help you save time and money. Or visit our sites at http://bestbuyersbroker.com or http://bestbuyerbroker.com.
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