Mortgage Brokers: Friends or Foes?

Brokers have been accused of contributing to the spike in mortgage defaults and foreclosures by encouraging borrowers to take risky loans and by charging excessive fees.

That doesn't mean consumers should shun all brokers. Many provide good service and can help people sort through the complexities of choosing a loan.

Consumers don't necessarily get a better deal by going directly to lenders, which also can charge excessive rates and fees.

To protect yourself, the best strategy is to shop for a home loan directly at a few lenders and then see whether a broker can find a better deal.

When choosing a broker, borrowers should ask tough questions first.

Among them:
  • In searching for loans, do you feel obliged to put my interests ahead of yours?
  • Exactly how much will you earn on this loan?
  • And how many lenders do you check regularly for rates and terms?




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