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Step 1
Make sure that you are working with reputable mortgage brokers. Check with the Better Business Bureau. If you know someone who has refinanced recently find out what mortgage brokers they used and if they liked them. There are lots of mortgage brokers out there, try to pick a good one.
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Step 2
Know your credit. Don't let the mortgage brokers tell you your credit is bad, make sure you see it. Know what your score is. Go to freecreditreport.com or a similar place. The better your credit is the better loan you will qualify for from the bank.
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Step 3
Know what the current market rates are, not just what the mortgage brokers tells you. Go to someplace like bankrate.com and see what is the current rates. Keep in mind that this will not necessarily be the rate you will get from mortgage brokers. It all depends on your credit, how much you owe on your house compared to the value of the house, and your personal income. There are other considerations, but these are the biggest ones that mortgage brokers look at.
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Step 4
After you have found mortgage brokers let them know exactly what you are wanting. You can not, for the most part, control the rate you get, but you can make sure that you are getting a fixed rate. Do not let the mortgage brokers talk you into an adjustable rate loan. These normally pay the mortgage brokers better than a fixed rate mortgage.
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Step 5
When you get to the closing there has to be an independent third party there from the title company. Many mortgage brokers will want to be there and in some cases there will be no representative from the title company at all. This is illegal, there has to be a representative from the title company to do the notary work right then. Also, make sure that the title company is not owned by the mortgage brokers. If you don't want the mortgage broker at the closing, tell them. The mortgage brokers should respect your wishes, if not find new mortgage brokers.
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Step 6
Finally make sure you understand all the important paper work. Make sure you know the rate and you know that it is the length of time you wanted and it is fixed for the entire time. Also make the title agent show you exactly how much the mortgage brokers is charging you. The amount paid by bank to mortgage brokers is the amount they are getting paid for making you take a higher rate. Know that you will never get the exact lowest rate available, but you should try to get it as low as possible. This is how mortgage brokers get paid. You don't work for free and you shouldn't expect mortgage brokers to work for free either. But you don't have to make mortgage brokers rich off your loan.
Comments
jeffkay said
on 7/27/2009 Great Article- wish I had read this years. I found this as well if anyone cares
http://www.bankapedia.com/mortgage-encyclopedia/faqs/645-how-do-i-avoid-getting-ripped-off-on-my-mortgage
but yours is a bit more informative
cwengre said
on 3/14/2009 Great advice on dealing with mortgage brokers. It really can make a difference on your mortgage outcome.
smzamarripa said
on 2/22/2009 Good stuff! I'm glad that you took the time to get educated about the process. Congrats on your re-fi! SMART MOVE in this market.
LuckyAngel said
on 1/29/2009 Great article. Wish I had known this information the second time I bought a house. I got jacked bad and had to refi through another company so that I wasn't one of those forclosures everyone is seeing on the news.
What do you think of Primerica out of curiosity? Or is it not the company but the specific Broker?