What Mortgage Brokers Do: mortgage brokers guide customers through the process of selecting a suitable mortgage package with competitive package offers. They also offer financial advice on mortgage and property. Their job is to find a mortgage package that meets the borrower's needs, and to help the client process and complete their mortgage application form. In the United States, mortgage brokers negotiate over 80% of home loans issued. Banks go through brokers to effectively outsource the job of finding and qualifying borrowers.

Insurance Brokers: Most people take out insurance on their homes. Insurance brokers source contracts of insurance on behalf of their customers. An insurance broker will help you to choose the best to fit your specific needs – important as there are many different levels of insurance coverage.

You should always remember though, while brokers are supposed to help you find the best deal for you – they work largely on commissions, and so many try and push the deals that suit them the best. If you’re armed with a solid foundation of knowledge about mortgages you’ll be able to identify a rogue broker very quickly.

All in all, a good mortgage broker really can help to secure a very good mortgage deal for you and it’s worth finding one if only to talk to.

How To Spot Potentially Bad Brokers/Lenders

In any multi-billion dollar industry there are sharks looking to prey on the uninformed and innocent. The mortgage niche can be very confusing to some consumers and this is why some sharks enter the market to make easy gains on trusting people.

Despite increasing mortgage regulations in most countries you still need to be on your guard. Your mortgage could be the biggest expense of your life so make sure you’ve researched everything thoroughly before signing on the dotted line.

Here are a few tips to help you determine whether the company you are dealing with is legitimate:

1. Beware if the lender doesn’t give you a good faith estimate of what the closing cost will be. Under The Real Estates Settlement Act, a mortgage broker must provide you with this information within three days once you have applied for a loan. An honest lender will give this to you without a problem, as there is nothing to hide. Some of the better brokers will even give you a good faith estimate on your pre–qualifying information. Also, watch out for any company that won’t give you information up front, such as interest rate and other fees.

2. Beware if the lender says it is ok for you to lie about any information, especially about your income, to increase your chances of approval. Any sort of lying on any loan form is classified as fraud and is a criminal act. If a broker is encouraging you to do such a thing, use your common sense. If the broker gives you the leeway to do it, then they will probably have no problem committing fraudulent acts upon you. Of course, there are exceptions to the rule. Just make sure to ask about this should the situation arise.

3. Beware of interest rates that are amazingly low or incredibly high. Low interest rates can be very tempting, especially when they beat everyone else by two or three percent. You may think that this will save you money, but in the long run, it will only cost you more, since most loans with significantly lower interest rates tend to increase dramatically throughout the lifetime of the loan. People with a less than perfect credit rating usually fall victim to high interest rates that range anywhere between two and three percent higher than everyone else. There are many places online that offer to check interest rates against your credit and can give you an accurate estimate of how much you should be paying. Make sure you are doing your homework.

4. Proceed with caution if you feel pressured into applying for a mortgage loan that you don’t understand or can’t financially afford. If you do feel unsure of anything with the loan, ask your broker to explain it to you in detail, or go to someone else who you know can trust. If you are being pressured to go with a certain company for a loan, proceed with caution. Never take a loan because you feel like you are being forced into it.