As mortgage loan application numbers dip in the face of rising interest rates, we’re witnessing some unfortunate, unsavory behavior on the part of mortgage brokers.

It works like this: a mortgage broker will advertise a rock-bottom interest rate designed to entice borrowers. But when a borrower fills out a loan application with these middlemen, they learn the advertised rate is actually out of reach for all but an extremely narrow segment of the population. The fine print might reveal, for example, that the deal is only good for people with a credit score of 800 or above who can afford to make a 45% down payment. Many brokers also promote access to a wide range of loan options from various lenders, but these options may not be available to all clients due to individual financial needs or unique circumstances.

Though we are not yet anywhere near desperate times, we’re already seeing desperate measures with these bait-and-switch tactics designed to mislead consumers. As mortgage brokers are increasingly squeezed by the drop in refi numbers, some are also advertising rates that were available in the past, but are no longer a reality. And more are getting into the non-QM space, even though they lack experience in that more complex type of loan underwriting. Home buyers who do not conduct proper research or understand the pros and cons of working with a broker vs a bank or credit union may face potential issues, such as unexpected fees, higher costs, or missing out on the best deal for their home loan.

Some borrowers might eventually walk away after they get wise to these misleading tactics, but the delay in funding might mean losing their dream house — an extremely frustrating situation in a competitive market.

While we always encourage borrowers to shop around and find attractive terms, selecting a mortgage lender isn’t solely about finding the best lowest rate, but also about identifying a lender who has the competence and expertise to underwrite a non-QM loan effectively. The best deal or better deal is not always guaranteed by working with a broker, and fees, closing costs, and additional fees can vary based on the lending institution and the specific home loan product. Comparing all costs and understanding what you are paying is essential to avoid losing thousands of dollars.

With a non-QM loan, your first question shouldn’t only be what’s your rate, but what’s your experience. Consumers should also ask, Will we have direct access to the underwriter? What’s the process? Who can we talk to? The loan process and requirements can differ significantly depending on the lender, and a good mortgage broker or loan officer should assist clients in making informed decisions based on their financial needs and best interests.

As middlemen, mortgage brokers won’t be the ones ultimately handling your loan, and they certainly won’t be capable of giving the concierge service that MBANC does. With MBANC, you have direct access to principal bankers, underwriters, and our scenario desk, where we can help qualify borrowers who have complex financial portfolios, such as multiple sources of income, or multiple kinds of assets. In contrast, working with a broker may mean you do not get all your questions answered or have someone act on your behalf throughout the entire process, especially if they are coordinating with multiple lenders or other lenders.

Even for borrowers whose finances are simple, our recommendation is the same: for the simplest, most streamlined, and most cost-effective experience, eliminate the middleman mortgage broker, and deal directly with an established mortgage banker. As a direct lender and institution, MBANC can offer competitive rates, lower fees, and personalized services compared to many brokers or big banks. Working directly with a bank or credit union can help home buyers avoid paying unnecessary fees and ensure they are getting the best terms for their home mortgages.

It’s also important to note that in the mortgage business, many brokers are paid by lenders, which can influence the advice they give. Understanding how mortgage brokers charge, how much you pay in costs and fees, and what you are paying for is crucial for making informed decisions. Real estate agents may refer clients to certain lenders or brokers, but it’s up to the borrower to decide which institution or person is best suited to assist with their home loan or investment property financing.

While some lending institutions, like credit unions, are known for lower interest rates and lower fees, customers should compare all options—including online lenders like Quicken Loans—to find the most suitable financing solution for their property and financial needs.

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Oct 10, 2021 : “Women Leaders Of Real Estate” 

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“With a hot housing market driving up home prices, many homeowners are finding themselves with increased equity to take advantage of. ‘Everyone should make their equity work for them, whatever that means to them,’ says Tabitha Mazzara, director of operations at MBANC.’”