loan broker

 loan broker – Loan ( mortgage ) broker – is a consultant who offers to all potential customers several types of loans from different lenders to choose from. In the West , on average, 25 % of total loans, designed for mortgages , banks give customers recommended brokers.

A significant increase in the number of brokers used by banks and other financial institutions in our country. Today, when the market can find dozens and even hundreds of different types of loans, many customers are looking for a loan to purchase real estate , use a mortgage broker to help you find the best loan terms .

Brokers are the main mediators between potential customers and creditors. They offer customers information on various types of loans offered by lenders . Usually broker services should not be paid by the client , as lenders pay them a commission for each loan that they have issued to their aid.

However , there are cases where the client is asked to pay the so-called ” Brokerage commissions ” , the amount of which varies widely ( in Western countries such commissions can be up to 2 % of the loan , for example).

Why use a broker

If you feel that they themselves are able to bypass several potential lenders , ask them specific questions and obtain the prior approval of the loan , it is perhaps unwise to entrust the matter to anyone else. But if you feel insecure or afraid that your application can be rejected for any reason, then the service broker will be very useful .

Approximately 20% of the adult population of Western countries can not obtain credit in the major banks of the country for financial reasons , including bad credit history , trouble verifying sources of income , etc. For these clients – use a broker – a logical choice .

Even for the category of clients who are not experiencing any problems , can be very convenient to use a broker , for example, due to the strong employment. A good broker can offer a wide range of loans from different lenders , including informal and help choose the most suitable option.

Which broker to choose

As in finding housing that would fit you best , and the search for a good broker require a specific job. Current legislation does not require brokers working in the field of design credits , be licensed .

Therefore , the first question that must be set to the broker is asking to what professional organization he belongs. Brokers may be members of various unions and associations, that is evidence that they meet certain standards.

Membership can help distinguish good from bad broker , but you should keep in mind that a lot of good brokers , unfortunately, are not members of professional organizations , as it is not binding on them .

If you decide to use the services of a broker , do not forget to specify the following:

What lenders active broker works ? Some brokers work with 20 or more creditors , and some – one – two only. Make sure that the broker is not just for banks, but also with informal lenders too. The larger the number of creditors , the more types of loans offered and the greater the likelihood of finding a suitable loan for yourself.

Calculated as the amount of commission that the broker receives from the lender? Because commissions received by brokers from different lenders may differ , some brokers are trying to use those who pay higher fees .

Should you pay the broker a commission or any other charges ? Typically , broker services are free, but some require payment of a sum in advance .

Ask a broker, as he compared the different loans and choose the one that , in his opinion , the most suitable for you? Comparison of various loans – not an easy task . Make sure you clearly understand what methods the broker used . If you do not receive a satisfactory response , it is likely the probability that the chosen broker loan for you , based on the size of their commission .

Find a comparative percentage of the loan that you recommended. All brokers must have at its disposal a comparative table ( comparative table of interest rates shows the so-called ” true ” rate , which is calculated taking into account all charges , commissions and other payments on the loan . If he does not have it , then here is something not so.

Make sure that the broker is not a representative of one of the creditors . In this situation , the broker only offers loans , draws data creditor , and not all possible in the market.

You have every right to know the professional organization in which this broker is and what his skill level .

Does the broker professional insurance? It should have such insurance. In case the customer will be forced to sue the broker for exceeding their professional credentials , causing material or moral damages due to the fault of the broker , then such insurance guarantees covering the costs .

Keep searching

Despite the fact that the broker can advise you the best terms offered by one of the lenders with whom it works, it’s possible that you do not get the most suitable loan. Therefore , do not stop at the first offer that you will find worth or will be recommended by the broker. Keep searching . More options with the necessary features you treat , the more likely choice, really , the best loan for yourself .

It is important to clearly understand that you are under no obligation after receiving advice from a broker . Broker is the same source of information , as well as your bank manager , seminar or read a good book in the ongoing search for the best loan. After hearing the recommendations broker, you are not obliged to follow his advice if you are unsure that the advice given by the broker – that’s what you really need .

Be alert – the warning signs of

Unfortunately, not all brokers are ready to really help in finding the best loan for potential customers . Therefore, using the services of a broker , be alert and watch for any warning signals .

Here are some of them :

broker offers only one type of loan ;

broker is not prepared to discuss a commission , which he will receive after making your loan ;

business cards broker are only a mobile phone number and the mailbox is given as an address ;

broker insists that your loan has already been approved , although you do not even fill out an application ;

broker does not offer to meet in his office ;

broker said that will help you to obtain a loan , but only after they have received from you a certain amount in advance ;

broker promises you get ” good” information about dohodeili other documents ;

despite the fact that you need money for improvement and improvement of their homes , the broker insists that you have signed the declaration , which states that the loan will be used for business , investment or other purposes ;

broker does not respond to your phone calls ?

Advantages and disadvantages of using a broker

Before using the services of a broker, you have to evaluate the pros and cons of such a service .

Benefits include the following:

Save time – one of the main advantages of using a broker is that he does all the work to find a loan. Brokers have access to all information pertaining to credit and it is their job to know what is new and interesting on the market .

Free service – very unlikely that the broker demanded a special payment for their services from a potential client . Brokers receive a commission from lenders , which they recommended client whose loan was approved . Very often, brokers receive a special commission , which the lender pays them for the entire time that their client is with him.

Sociability – most brokers mobile and can visit you at home or in the office at any time convenient for you .

The disadvantages include the fact that brokers are not always objectively assess the situation . Their recommendations can be based only on those loans, which are offered by lenders who pay them higher commissions. In this case , you recommended a loan , not really always be the most suitable for you.

After receiving advice from a broker , do not be lazy to conduct your own market research to compare the interest rates offered on loans , charges and commissions, as well as other characteristics that may be useful to you .

Doing this kind of work , you will not only enrich themselves with new knowledge , but also make sure that the loan that you have chosen is really the most suitable for you. Do not forget that when dealing with a broker, you do not lose anything , but rather , get valuable information that you can always come in handy.

Drawing up a contract with a broker

If you decide to use a broker when you make your loan , make sure you make a written contract with him , which must sign both sides : you and the broker . Such agreement must include the minimum information on the broker, such as address and contact numbers of business registration and other business data.

Additionally, you must include your data , counting all charges and fees that you will have to pay the creditor , any commissions that you have agreed to pay the broker , specify a time frame for your payments , the interest rate of the loan that you have chosen , and the method of repayment its duration.

Do not forget to find your broker or the lender operates directly or through another broker . If another broker is involved , then have a clear idea about all the extra fees that you have to cover .

Typically , local law requires licensing of brokers involved in loan processing . This means that almost anyone can work as a mortgage broker – without any special training or practical experience. Remember this always , when acting through a broker.

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