Mortgage Broker Asked For More Money To Close - If your mortgage broker asks you for more money to close then was originally quoted to you do not assume you are trying to be ripped off. A few things can and often do change from the time the initial good faith estimate is provided to you. One item that can change is the prepaid interest for the month. If you change closing dates this amount can increase or decrease depending on how many days in the month are left when you close.

In refinance transactions, a variation in the amount of property taxes which your county or city reports as being payable over the next several months is a leading reason for your Mortgage Broker asking you to bring more money to close. Please keep in mind that your tax bill may or may not reflect recent payments, and providing sufficient evidence of payment may enable you to close without bringing the additional cash to closing.

If your mortgage broker asks for more money at close this could be because of many reasons. The title company that is being used, because the seller requested the title company, could charge more money than the title company's that your mortgage broker normally uses. While, the mortgage broker should ask for the title company's fees ahead of time and obtain this information, sometimes small items can get overlooked, sometimes title companies try to add small junk fees, or sometimes different title companies pay more for other services, such as a survey or title exam, than your mortgage agent is accustomed to. Mistakes do happen sometime and chances are that this type of mistake was completely unintentional. However, if there is a large discrepancy between what you were told your closing costs would be and now you are asked to bring in a considerable amount of money above and beyond what you were told initially, then I would be concerned, ask a lot of questions, and possibly consider not closing with the mortgage company.

Are you working with a shady lender/broker? - In general, 90% of mortgage professionals are honest, hard working, and do have your best interests in mind. Due to the overwhelming growth in our industry over the past several years there are bad apples that have slowly trickled into our industry.

Tighter regulation in our industry will continue to help curb the problem, but in the meantime you can watch out for the following hints and practices of shady mortgage lenders and brokers:

Any reputable lender should be willing to give you any of the numbers they quote in writing. Actually, by law they are supposed to give you a copy of a Good Faith Estimate, and Truth In Lending Disclosure within three days of your application. Failure or unwillingness to do so may be a red flag.

Another scam pulled by some mortgage companies is to force you to purchase credit life and disability insurance. This type of insurance pays off the debt if you die or become disabled.

This type of insurance is strictly optional. Purchasing this type of insurance will not affect your loan approval. Purchasing this type of insurance can add considerable costs to your loan.

If you are being asked to pay several points, but you aren't getting a lower interest rate in return, you could be working with a shady mortgage broker.

For example, you are paying 5 points, you have decent credit, but you are still paying an interest rate that is above the market average.

One common tactic of the shady lender/broker is to ask to see the Good Faith Estimate of any other lender or broker you are working with, then tell you that he can get you a better rate and/or lower fees. Everything is great until one or two days before closing. Then "something happens." You are told your credit score dropped, or the lender changed guidelines, or rates went up before they were locked. Now, your rate and fees are as high or even higher than with the original lender or broker and you don't have time to switch back.

If you have some questions or problems with your mortgage loan after closing on a refinance loan and your mortgage lender or mortgage broker does not return your phone calls while you are still in your 3 day period of rescission, you may be working with a shady or unscrupulous mortgage broker/lender. This is a tactic that has been reported by consumers after they have closed on their mortgage loan and they are unable to contact their loan officer to ask questions, request further information about their new mortgage loan, or to rescind on their mortgage loan. Take note that you can rescind your mortgage transaction if you are not comfortable with the mortgage loan or you do not trust the loan officer that set up the loan by contacting the title company or attorney that handled the closing of your mortgage loan and by placing your rescission request in writing. I would recommend notifying the actual lender, the loan officer's office, and the title company to insure your loan is cancelled in time, if that is what you feel is necessary because you are not getting anywhere with trying to contact your mortgage broker/lender.

Another simple way to see if you're dealing with a shady lender/broker is to check their record with the Better Business Bureau. If you see a pattern of multiple complaints, and specifically unresolved complaints, you may want to look elsewhere.

Finding the Right Broker - You can find plenty of mortgage brokers in most cities these days- and although more choices means more competition, which could translate into a better deal for you; you may have a hard time deciding where to turn. After all, you don’t want to base your decision on price alone; much in the same way you don’t want the cheapest plastic surgeon, a bargain-basement-priced loan today can often cost you much more in the long-run.

Here are a few good sources for finding the right broker:

A good place to start might be family and friends who’ve maybe purchased or refinanced recently. A strong recommendation from a trusted source can save you weeks of searching and shopping. And brokers tend to give referrals special attention in the hopes of keeping the floodgates open and the referrals coming.
Note that most experts do recommend finding at least one other broker to compare with; however, shopping your loan with too many brokers can actually hurt your loan.

Finding the right broker for your home loan can seem difficult, especially with all of the options available today. While you may be tempted to go with the broker who offers you the lowest mortgage rate, this rarely results in a positive outcome for borrowers.

Attending First Time Home Buying Seminars or your city's chamber of commerce are just a few venues to meet mortgage brokers who are active in their local community. Use the Internet before hand to research questions to interview several mortgage professionals to understand how they conduct business.

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