The 7 Habits of Highly Effective Mortgage Brokers

Honesty is the most important feature in choosing a loan broker. Unfortunately not all brokers are honest. Being sensitive to the following good business practices will help you choose the best broker and get the best refinancing agreement.

Habit 1: They don’t favor their own inventions

Your difficulty is in being aware if the loan adviser is also a provider, i.e. are they playing for both teams? If they are, and the proposal is their own creation, there is a reason they’re pushing the product.

Habit 2: They are unbiased

Mortgage brokers get commissions from the loan provider you choose. You will want to ask them to be honest about the commission they are receiving. The best brokers are honest and won't object to you asking this question. The dishonest ones will think twice about working with you.

Habit 3: They give you the true cost of refinancing

Make friends with the broker who provides you with the annual percentage rate (APR), when looking at, or comparing any home loan. The annual percentage rate shows you the existent price of a home loan by taking into consideration all the foreseeable fees and charges associated with the loan. This is so you can compare home loan options easily.

Habit 4: They give you all the information

You need to have all the information. What is the fixed-rate provided by the broker? Do they give ongoing benefits and assistance after you choose your loan? If so, find out how long this lasts. Also, what are the fees involved? You’ll need to know about broker fees and provider fees. The best agent will make this clear before any papers are signed.

Habit 5: They make sure the client understands

You have to understand what the costs and benefits are for you. The best mortgage brokers will show this to you in a clear way, so you can understand it. This is so you can weigh your options and decide for yourself if refinancing is actually in your best interest. As confirmed in “Dangers of Refinancing” there are some bad practices out there, e.g. churning. The broker needs to make sure you understand everything that is happening, making it impossible for you to become a victim.

Habit 6: They’re insured

The broker must have his/her own professional insurance. This protects people against liability claims resultant from careless work. All providers have it. However, brokers should not use the cover of an umbrella organization. They should have their own insurance.

Habit 7: They’re capable

Is the agent qualified to give you loaning advice? All countries have reputable organizations that normalize the mortgage industry and can grant brokers membership, certificates, and credentials, provided they take certain courses. Make sure your broker has the proper credentials and is qualified to refinance home mortgages. In the United States, the American Association of Residential Mortgage Regulators (AARMR) and National Association of Mortgage Brokers (NAMB) are two such companies.