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Ways to Avoid Broker Frustrations

Posted on February 19 By MLP Lending Guide

When brokers negotiate with borrowers, they will sometimes employ tricks that effectively raise the price of their services, a cost which must be borne by the borrower. There are dozens of such tricks, but the result of each is the same: the borrower spends more money while obtaining a mortgage. It is very difficult for the average borrower to avoid such tricks, as the borrower can rarely match wits with the broker in matters concerning mortgages and real estate. Therefore, it is a simple fact that many borrowers pay a larger broker fee than they need to.

How is it possible to avoid this situation? Some individuals have tried making brokers compete against one another in order to get a lower price on broker's fees that are an essential part of every mortgage. However, as brokers do not usually compete with one another on the same loan, the borrower in this situation will be at a few disadvantages: a resentful broker may try to manipulate the closing fees in order to rack up the price, and the broker may not be willing to go the extra mile if there are any serious problems with the mortgage.

A better solution would be to insist upon knowing the exact broker's fee before the work begins. That way, the broker will be forced to bypass any and all tricks so that the quoted price is maintained (It should be noted that the price of the mortgage cannot be set beforehand, only the broker's fees). Another option is to check out the list of the Upfront Mortgage Brokers, a group of brokers who quote a fee for their services upfront. By utilizing a broker in this group, the borrower will avoid tricks, unnecessary fees, and probably a lot of frustration.

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2 Responses to "Ways to Avoid Broker Frustrations"
  1. Isaiah Badie 14, Mar, 2010

    Hey there , i wanted to stop and say thanks for that article this is one of the best sites ive found in a long time.

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  2. Norris Aikens 03, May, 2007

    I am being told there will be a "Commitment Fee" charged which is non-refundable for an FHA purchase loan. This fee is to be $795.00, and must be paid by a certain date. The property being purchased is in the state of Texas, and the demand for the fee is included in a commitment letter, which the loan officer states is an approval document. Further, the loan officer has stated they do not need an FHA case number (for what ever reason) to issue their approval. Please advise is any of this legitimate?

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