A considerable amount of a mortgage broker’s salary is based on the commissions they receive for completing a loan transaction. The market continues to increase in competitiveness, since mortgage brokers now has access to wholesale markets and because of the lower overhead involved with running a brokerage firm. Access to wholesale markets means a mortgage broker can get loan approvals from some of the largest lending institutions in the country. A mortgage broker can instantly adjust interest in order to compete with other firms for clients. Also, they don’t have to follow the fixed profit margins of larger firms and this flexibility has allows mortgage brokers to take over a very large share of the mortgage market. Lending rates are constantly changing and a mortgage broker will do well to compare the day’s rates before deciding on the best lender for their clients.
On the flip side mortgage brokers face somewhat stricter regulations regarding what they have to disclose. One example of information that a mortgage broker has to disclose and a bank usually does not necessarily have to is the yield spread premium. Brokers make money because they set the interest rates of mortgages above the wholesale prices. The yield spread premium is the money paid to the broker based on how much higher the interest is set above the wholesale rates. Another even stricter mortgage broker requirement is to provide the customer with a Good Faith Estimate, which outlines in detail all the costs associated with the mortgage. Since all mortgage brokers must provide their clients with this information it is an excellent way to compare offers between different brokers.
Recently enacted laws regarding mortgage brokering have done much to help consumers. There are now standards in place that a mortgage broker must comply with when charging a client fees. To avoid having the mortgage deemed as a “High Cost Mortgage” the mortgage broker must keep the fees charged under a certain threshold. In every state except California a mortgage broker does not have a fiduciary responsibility, financial liability for giving bad financial advice, to act in the best interests of their client. A word to the wise looking to purchase a mortgage outside of California is to shop around.
It is especially important to be extremely cautious with the high occurrence of mortgage fraud reported by the FBI. If a broker asks you to falsify documents, for example your monthly income, then you need to cut ties with them immediately and report this activity to the authorities. Another area where a dishonest mortgage broker may seek to defraud a borrower is by refusing to reveal their yield spread premium or some other illegal hidden fee before the deal has been closed. The federal government is working hard to put an end to these sorts of dishonest mortgage practices and with the help of well-informed consumers these type of predatory lenders can be stopped. Using the information in this article can help you to choose a reputable mortgage broker to handle your loan.
By: David Nalin
Archive for October, 2009
Changes in Regulations Governing the Mortgage Broker Market
October 30th, 2009Hello world!
October 30th, 2009Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Mortgage Broker Strategies 101: Back to Basics
October 29th, 2009Mortgage Broker strategies are important as you very well know, but have you considered all the marketing you can do on a day to day basis. This is not the type of marketing where you put an ad in the paper or hire a call center. These are the little things you can do to make sure that your mortgage business continues to grow. These are the things that cost very little but are huge in terms of keeping business as well as high customer satisfaction.
Fist Tip
Whether you are sending out a letter, a card, or even an ad for the paper, make sure you use effective writing techniques. First among these is to make sure that you have a headline on everything you do. Whether people realize it or not, the headline grabs the reader. Once they see a headline, they are way more likely to read the rest of the piece of text. Always make sure that the headline has a benefit in it so that your client has a reason to keep reading.
Second Tip
Keep writing! For many people, the thank you note has raised their income by large percentages. Every person, customer or friend, loves to show appreciation. They like to know that you are happy for them and that you realize what they have done for you. When you thank them you are connecting with them and helping to cement a future relationship.
If you make it a point to write thank you notes every day, you can really help your return business. Thank people who didn’t even work with you on a mortgage. You can thank those who did something for you: your mechanic, mailman, or even the teacher your kid has at school. Whatever you do, just make sure you send those thank you notes. It will definitely pay off for you.
Third Tip
Be a braggart. When you do something for a client, make sure you tell them. You want to make yourself valuable to the client for a couple of reasons: so that he or she understands why you are getting paid, and so that he or she would refer you to someone else in the future. This can be very valuable down the road. Even though bragging seems harsh normally, so be humble and just point out the things you accomplished because in business you want to be valued.
Fourth Tip
This is a strange one for many, but make sure that if you have a phone person, that he or she always suggests that you are with a client. If he or she says “I’m sorry but he is working with a customer right now, give me one second to see if he can take a call right now”.
This allows you to look busy and confirms that you are worth the effort to work with. It also gives you an out if you don’t want to talk with a certain person for one reason or another.
Last Tip
Though there is an unlimited amount of advice that could be given about mortgage marketing techniques, there are some that are certainly more important. One of those is this: never stop marketing. Even if you are the best mortgage broker that ever walked the planet, if you cannot market then it won’t matter. Nobody will know you are great, you will have no business to close, and you will not make any money.
Above everything else, mortgage is about getting clients in your door. The rest is just paperwork and learning the ropes of the loan biz. With that in mind, there is one other thing you should consider:
Form realtor partnerships whenever you can. If you can find a program that will help you hook up with realtors the right way, you should jump on it. By giving yourself that extra advantage, you are enabling your business to grow without making yourself do more work.
With a partnership with the right realtor, you may find yourself with a large number of renters turned buyers on your desk each day. What a great way to run the mortgage business huh?
So no matter what you do, implement a new marketing tip each day. Try to send out thank you notes, thank people in person, look for times to brag about your self, and even try to keep marketing. Above all, find ways to form those partnerships. Getting hooked up with a realtor and with changing renters into buyers, you will grow your business faster than you ever imagined.
By: Shane Brooks
Mortgage Brokers Help you Find the Right Mortgage
October 29th, 2009Taking out a mortgage is usually the biggest financial transaction in most people’s lives. It is always important, but in these days of rising mortgage interest rates, higher mortgage fees and less certainty of getting a mortgage anywhere due to the squeeze on credit, it is more critical than ever to find the right mortgage product to suit you. To do this it is sensible to look for a mortgage broker to help you.
There are thousands of mortgage products to choose form and by no means all will be suitable for you or your personal circumstances, but narrowing the choice down is not easy, and that is why advice from a qualified mortgage broker with access to most of these mortgages, including some products that will not be available directly to the public is invaluable.
Strolling down your local High Street may give you a range of deals available from the top names in banking and building societies, but it does not necessarily give you the best choice of mortgages. It is better to get in touch with a qualified FSA mortgage broker.
Property prices have gone up in leaps and bounds over the past ten years. Although they are now showing signs of slowing down, it is possible that you may be looking for a bigger mortgage than has been the norm in the past. It is traditionally the case that most mortgage lenders have a ceiling of £250,000 for their mortgage loans, but there are some lender who specialise in very large mortgages. If High Street lenders deal in large mortgages, then their interest rates tend to be higher than normal. Most lenders only take into account an earned salary of either an individual or a couple. Often people looking for large mortgages will have other sources of income as well, and they need the lender to take these into account. These may include other investments, stocks, shares, and income from a business the borrower owns. It is important, therefore, to find a mortgage broker who understands these issues and can give you the best advice for your circumstances. Relevant questions concerned with large mortgages and larger properties may involve capital gains tax issues surrounding large cash back sums; insurance to cover the large sums involved; running costs for a large building, or even a grade I or II listed building.
It is tougher than ever for first-time buyers in the UK. The affordability gap has never been wider, with the increase in the price of property outstripping wage increases. With additional requirements for deposits, mortgage arrangement fees and stamp duty, first-time buyers are staying out of the property market longer than ever. A further problem has been caused by the global credit crunch as lenders tighten their lending criteria, so any slight problem with a would-be borrower’s credit record can result in a negative response from many lenders. A mortgage broker can help borrowers through the mortgage minefield, and assist in getting the best deal in the most difficult of times in the property market.
By: Nick Riviera
Use A Mortgage Broker For Your Remortgage
October 28th, 2009Using a broker for your remortgage who offers whole of market advice is the best way for you to remortgage. If you go direct to your bank they will sell you something from their own limited range. A mortgage advisor can provide all the information you will need to help you make that final decision on which mortgage product to apply for. The best time to remortgage is three to four months prior to your existing mortgage deal finishing. It used to take around six weeks for an application to be approved however in these times of lenders being much stricter with their lending, checking every detail thoroughly it now can take quite a bit longer for your application to be approved. It is worthwhile doing some homework before approaching a mortgage lender. If you have a better understanding of the types of mortgage products as well current interest rates and best buys available, you will get a lot more out of the appointment. There are a couple of key questions to ask an advisor before choosing a mortgage broker. First of all ask if they are a ‘whole of market’ broker. When the broker is selecting mortgages suitable for you it will then compare it against every available mortgage product on the market. There are brokers who just search a small number of lenders. ‘Whole of market’ remortgage brokers UK is crucial. Secondly it is important to ask if they charge a fee. Brokers earn their money through commission however some also charge a fee. There are many brokers on the market who don’t charge a fee so finding a broker for your remortgage shouldn’t be hard. The advice from fee free brokers is just as good as and often better than those who decide to charge a fee. The final piece of advice; find a remortgage brokers UK that you are comfortable with. Are they pleasant and provide a professional service? The mortgage broker market is very competitive and with mortgage lending low at the moment, every customer counts at the moment. If you aren’t happy with one broker you will quite easily find another with much better service.
By: Chris Borthwick
Adverse Credit Mortgage Broker Fees
October 26th, 2009Just because you suffer from adverse credit, it does not mean that you will automatically need to use the services of a mortgage broker who will charge a large fee when helping you apply for an adverse credit mortgage. Although the fees targeted at adverse credit mortgage applicants are normally high when compared to applicants with clean credit, some brokers choose to not take advantage of the situation and do not charge excessive fees to their adverse credit clients.
Mortgage brokers have been known to charge up to 5% as a brokerage fee for adverse credit mortgage applications simply because the client has a poor credit history and will have little choice but to accept whatever mortgage they can get. Such mortgage brokers justify their excessive fees by suggesting that it is more difficult and time consuming to source and process an adverse credit mortgage application than it is for a clean credit mortgage. This is not necessarily true, and buyers should be aware of this.
Although there is some extra work involved when a client has adverse credit, it is probably not enough to justify such a large increase in fees, which usually ranges from 0% to 1% for clean credit mortgage applications. The extra work may involve an evaluation of the applicant’s credit file and some extra research into the market to locate the particular lenders who will consider the case.
In addition to excessive client fees, many adverse credit mortgage products provide large procuration fees to mortgage brokers for successful applications. This may be due to the high level of competition in the adverse credit mortgage field. Mortgage brokers may tend to favour lenders who pay the highest procuration fees despite the fact that they are supposed to ignore this factor and focus solely on the client’s needs.
By combining the increase in client fees with the large procuration fees that can be earned on successful adverse credit mortgage applications, it is clear to see that this type of mortgage is lucrative for mortgage brokers. It is for this reason that some mortgage brokers specialise in finding home loans for people with impaired credit files. It can be quite a lucrative endeavour.
If you suffer from adverse credit, it may be necessary for you to employ the services of a mortgage broker to help you find an adverse credit mortgage to suit your needs. Be aware, however, that it may not be necessary to pay excessive fees in order to secure such a mortgage. Although most mortgage brokers will charge excessive fees for adverse credit mortgage applications, some will not, so it pays to shop around.
If in doubt it may be a good idea to conduct some initial research on your own. This can be done through any one of many mortgage comparison sites which display best buy tables for adverse credit mortgages. By conducting research on your own and becoming familiar with the market you may not be at the mercy of brokers who think they know it all and charge hefty fees.
By: michael sterios
Online Mortgage Broker Training With Short Sale Training
October 24th, 2009Many people carry forward the misconception that online training leads to no good but, as a matter of fact, the online training courses are much more efficient that the live courses. They not only provide you with reading and study material but also with video clips of live seminars to give you a first hand experience of the problems that one faces and the solutions that he or she should suggest.
Online mortgage training programs include important subjects like loan processing, loan originating and its process in your syllabus which are extremely important from the point of view of a mortgage official. They also provide you with a license of the post that you have studied for, with a validity of 12 months. These 12 months are the period that the student revises his or her studies and takes some first hand experiences on hoe to mange everything. Once this period is over, the candidate becomes eligible for an original license from the government.
The online mortgage training course inculcates in you values like operating procedures efficiently, avoiding mistakes, handling problems properly, getting customers and retaining them, increasing financial performance and many more values that are important from the point of view of an mortgage official. The training course is divided into a number of small sections thus making it easy for the user to access the part he or she wants to and avoid opening the others. There are time limits given to the users to complete doing specific parts of their work thus teaching them time management. To give the user a revision of the topics he or she has covered, there are quizzes available in between. These quizzes not just make the user efficient in his work but also avoid the course from becoming a bit monotonous.
The online mortgage training course can also be used by trained individuals to increase their productivity and also to increase their income. Reviews about these online mortgage training courses state that they are extremely to the point and efficient. It also says that they provide us with more practical knowledge than live classes do. The duration of these online courses is not fixed and thus they can be available for you as soon as you sign in on the respective site.
These online mortgage training courses offer you an option of completing the course in as much time as you want thus putting no pressure on you. Thus, these online courses can be the best option for people unable to attend live classes to complete their education up to the level they desire while they are still working.
Short Sale Training
In today’s real estate market, the once lucrative opportunity of being a loan officer or mortgage broker originating loans and refinancing homeowners is no longer so lucrative. The sub prime mortgage meltdown and the mortgage credit crunch has really put a damper on that traditional business model.
What all of the mortgage news sources don’t tell you is that the short sale mortgage business is doing fantastic right now. There are more defaulted mortgages in the marketplace right now than we have ever seen before. The transition from a residential mortgage broker business to a short sale mortgage business is very easy. The mortgage brokers and loan officers that use my short sale mortgage system are making ten times more now per file than they used to make by only originating loans. The opportunity to make big money in real estate short sales is now.
A mortgage loan officer has to know everything about short sales, defaulted mortgages and foreclosure investing. The short sale mortgage business is the best mortgage business opportunity right now in the mortgage market. The traditional mortgage business is not nearly as lucrative as it used to be. The big money in the mortgage business is being made with defaulted mortgages.
You can get started in the Short Sale Business Today with no cash, no credit and no previous experience. Also, there are no licenses needed like there is with a traditional mortgage business. This allows you to get started immediately because you don’t have to prepare for a test or anything like that. You can start making money now and continue learning along the way.
To get a Free Online Mortgage Lending Training Course in Short Sales, Go here:
Mortgage Lending Training in Short Sales
For more info, go to: www.realestateforeclosuresinvesting.com
By: DCFawcett
Accreditaion for Mortgage Brokers
October 24th, 2009Mortgage brokers are blossoming in the current environment and are gaining an increasing share of the mortgage market. This is great news because you should consult with a mortgage professional when you’re making one of the most important financial decisions of your life. But, keep in mind, that not all mortgage brokers have the same level of training and experience.
That’s why it’s such great news for Canadians that the mortgage industry now has national accreditation: the Accredited Mortgage Professional (AMP). When you meet with a mortgage broker with an AMP, you’ll be assured that your business is in the hands of a professional.
Canadians are accustomed to purchasing financial products like investments and insurance from an accredited professional. Now they can look for a similar professional designation from their mortgage expert.
Like similar accreditation programs for mutual fund sales people, or stock brokers, the AMP is designed to ensure an appropriate level of training and experience. Mortgage professionals from every field are eligible to acquire the accreditation: from mortgage brokers on the front lines to those who specialize in lending or mortgage insurance, for example.
While the vast majority of Ontario mortgage brokers take seriously the important responsibility that they have to their clients, the designation provides mortgage customers with a tool to help select their mortgage expert. This kind of designation is especially valuable in an industry where provincial regulations vary – and so a variety of practice standards are in place. A single national proficiency standard brings mortgage brokers in line with other financial professionals.
The AMP designation can now offer you confidence that your mortgage broker has industry experience, has taken ethics and industry training, and is committed to a program of ongoing education to retain their designation. In order to qualify for the designation, mortgage professionals must have at least five years experience or successfully complete a recognized mortgage professional proficiency course, and take an ethics training course. They must also commit to a minimum 10 hours of continuing education each year, and agree to be governed by the professional code of the national CIMBL organization.
With a growing number of Canadians now seeking the services of independent mortgage brokers to help them assess their mortgage options – in a $600 billion industry – the timing is perfect. It’s your money, after all, and you should have the tools to make the best possible decision. An independent mortgage broker can offer you the broadest range of mortgage rates and options. Now they can also offer you the added assurance of their newly minted designation: the AMP.
By: The House Team Of Mortgage Intellingence
