How to choose a mortgage broker in NYC
The fact that there are mortgage brokers out there, who got into the business to make money only when they determined that there was an influx of people looking to purchase property does not surprise me. The fact that mortgage brokers are still charging, and people are still paying, ridiculous hidden fees and “points” does.
One of our clients had this very issue come up recently with respect to a mortgage they applied for. While the broker claimed he did not charge them points, he nevertheless took it upon himself to charge thousands of dollars to “Lock In” the clients interest rate. While these lock-in fees typically occur, the underlying reason why one would charge such a high fee, in my opinion, is to make sure that client does not leave to another broker. Having said that, if your mortgage broker is attempting to hold you hostage (again my opinion only) by charging tremendous fees and hoping you won’t back out of the deal, perhaps this isn’t the mortgage broker you should be doing business with.
How do you avoid the above scenario? It’s not as easy as one may think. Many people agree to such fees because they think that every broker out there charges them. However, before signing anything, one should always do their homework. Ask family and friends for recommendations. Also ask the broker for past clients who would recommend them and FOLLOW-UP on these recommendations! Finally, sit down with your attorney to determine whether or not the fees that are being charged are legitimate, and more importantly, acceptable to you. There are so many great brokers, lenders, etc. out there, so don’t just decide on the one that gives you the best rate. Especially when it comes to choosing a mortgage broker, you need to work with someone you can trust.
In this short podcast, I discuss best practices in chosing the right mortgage broker in NYC