One of the worst experiences that you can get in the quest of finding a property for your own self, family, or just anyone, is to fall into the hands of a bad mortgage broker. Of course, there are some good and nice mortgage brokers out there who would look out for a fair deal for you and would not want you to be scammed or ripped.
But the recent trends indicate that a lot of mortgage brokers are actually the ones ripping you themselves, and most of the time, the clients do not know when they are ripped, even after when they have been ripped.
Here, I will be revealing how mortgage brokers rip you off. This will include signs of a bad mortgage broker, ways you can get ripped off by a mortgage broker, as well as several other factors that matter.
Who Is A Mortgage Broker?
According to Investopedia, a mortgage broker is basically just an intermediary whose job is to bring mortgage lenders and mortgage borrowers together, without using its own cash or funds to originate the mortgage.
How Mortgage Brokers Make Money?
Basically, mortgage brokers make money whenever they have a lender who requires mortgages. At the end of every mortgage transaction or loan, the mortgage lender pays a commission, fee, or percentage to the mortgage broker.
Ways You Can Get Ripped Off By A Mortgage Broker
The aim of every mortgage broker that wants to rip you off, is to play on your ignorance of the mortgage services. This is why, the broker will bring up several issues, with the aim of testing your knowledge of a mortgage brokerage transaction.
1. Hidden Fees
This is probably the most popular way that most mortgage brokers use in ripping off their clients. Via this method, they introduce juicy packages to you without briefing or informing you on everything that you should know about it.
This includes the hidden fees that they will be charging you.
2. SubPrime Loan
A subprime loan is basically a loan that is offered to individuals most often at a higher interest rate.
he Mortgage broker could try ripping you off by recommending a subprime loan for you, knowing that the interest rate and always high, when you actually qualify for the prime loan.
3. Hiding Vital Loan Information
Another way that a mortgage broker would try ripping you off is when they hide information from you. This includes information regarding the loan repayments, their fees as well as the various loan plans available for you.
4. Not Answering All Your Questions
One of the main uses of a mortgage broker is to ensure you are given the best loan options. This includes educating you on it and answering your questions. A mortgage broker that is not answering your questions is likely ripping you off.
Signs Of A Bad Mortgage Broker
Getting scammed or ripped by a bad mortgage broker is a very terrible situation that anyone can face. Especially considering the fact that the mortgage broker is supposed to be the one helping you on choosing the loans.
However, most of these bad mortgage brokers have traces and signs which will help act as red flags. Here are a few signs of a bad mortgage broker –
- Poor Social Media Presence
- Poor Reviews
- Unregulated Broker
How To Avoid Being Ripped By A Mortgage Broker
Aside from knowing how mortgage brokers can rip you off, it is also important to know how you can avoid getting ripped off by a mortgage broker. Here are a few tips on how to avoid getting scammed by a mortgage broker –
- Check if the mortgage broker has a license
- Educate yourself on a mortgage brokerage deal
- Check the review of the mortgage broker
Frequently Asked Questions
Is My Lender Ripping Me Off?
Well, the chances are high that your broker could be ripping you off. Check out for signs if the mortgage broker is actually ripping you off.
If My Mortgage Broker Is Not Responding, Does That Mean They Have Ripped Me Off?
No, if your mortgage broker is not responding, it does not mean that they have actually ripped you off, although that is a red flag. But appeal to the broker and try contacting them later. If they still do not respond, you can take further action.
Is It Worth It Using A Mortgage Broker?
Yes, it is absolutely worth it to use a mortgage broker. Mortgage brokers help by giving you advice and other information about the loan. They help choose the best loan for you.
Obinna Kenneth is a Tech enthusiast who is keen to keep tech lovers informed on various apps, gadgets, and systems. He also writes about other niches professionally, including gaming and the like.