The amount that a mortgage broker is going to charge you for the lenders should be presented very clearly to the borrower write the beginning. The mortgage broker typically charges a commission in the range of .5% of the loan amount. The percentage of commission could be low on the home loan of a large amount and high on a smaller amount. Since the time given by the mortgage broker to your account is not directly proportional to the amount of borrowing, you have every right to ask how much the mortgage broker is charging for services. You also need to know if he is being compensated directly by the lender. Ask for this information in written. Remember, it’s your money. You can negotiate with mortgage brokers specially on larger loan amounts. A 1% commission comes to $750 on a loan of $75,000. But the same commission percentage on a $300,000 loan comes to $3000. It is also advisable to know how to mortgage broker is charging you as some mortgage brokers are known to push programs with super high interest rate and features that favor the lender because of a higher commission that they get for doing this. Some mortgage brokers may also try to take advantage of a borrower who has problems with his credit rating and hence cannot qualify for a mortgage loan easy.
The commission and the fee that’s the mortgage broker charges has to be revealed in the good faith estimate. This is required by the law. If a mortgage broker does not disclose her or his commission and lender paid rebates you should probably not work with them. You’re going to see the brokers cut on the loan settlement statement anyway at the loan closing.
If the mortgage broker you’re interviewing quotes a better rate than the lender you have found, you can verify the rates directly with the lender. However, most of the mortgage brokers will not reveal the source of information on the lender that they have gotten the rates from with the fear that you might decide to deal with the lender directly. They will not reveal this information for the fear of you bypassing the services until you pay them a few hundred dollars to cover the appraisal and credit report.
However, if you cannot find the rate that the broker promised from the lender, it does not mean that the broker is lying to you. In rare cases a mortgage broker may offer you a slightly better deal than you would’ve gotten on your own. However, if the broker was playing games with you to get your business, charging the brokers charges on your credit card allows you to dispute the charge and get your money back.