A few years ago, a Miami Herald reporter broke the news that thousands of convicted felons were working as unlicensed mortgage originators and brokers in Florida. This happened because a license wasn’t required to be a mortgage originator in Florida, and many mortgage lending firms didn’t conduct background checks on the brokers they hired. Since this time, U.S. legislators have passed laws that require all loan originators and brokers to be licensed. Unfortunately, these laws don’t mean that there aren’t still a few unlicensed criminals masquerading as mortgage brokers and loan originators. The laws simply make it more difficult for such criminals to get away with what they’re trying to do.
Choosing the right mortgage broker is essential. The kind of deal you get on a home can directly influence your financial future. It may be relatively rare for you to end up doing business with an unlicensed mortgage broker with criminal intent. However, there’s still a somewhat good chance that you could end up working with an inexperienced or ineffective mortgage broker. Working with the wrong kind of mortgage broker can cost you. So, it’s critical that you find both a trustworthy and knowledgeable broker before you sign over any paperwork that will affect your financial standing in the years to come. Before you settle on any particular broker, here are three things you should do to ensure you’re making the right choice:
1. Research career histories
The internet has made it relatively easy to figure out people’s professional credentials. Simply Googling specific mortgage brokers will probably lead you to their LinkedIn profiles. From there, you can see how long prospective brokers have been successfully helping homebuyers. If you find out that a prospective broker has only been in the mortgage lending business for a couple of years, you may want to keep looking for a more experienced broker. Similarly, if you can’t find much information online about the career history of a broker, it might benefit you to consider your other options.
2. Check for proper licensing
If what a mortgage broker is offering you seems a little too good to be true and makes you feel somewhat suspicious, it may be in your best interest to check to see that specific mortgage broker’s licensing status. There are a few online websites that allow you to search for specific brokers to figure out whether they’re currently licensed in your state. Use these sites to help you avoid dealing with a broker who’s lost his or her license or never had one at all.
3. Read the paperwork offered to you thoroughly
Sometimes a mortgage broker can have a squeaky clean track record but still not have the best of intentions. Keep in mind that most brokers and loan originators work for commission from lenders. The better deal they get their lenders, the higher their pay will be. Good, honest mortgage brokers who look out for you and truly find the best deal for you do exist. They’re just not always the norm. So, read paperwork carefully before you sign it or agree to exclusively work with a specific broker.
Buying or refinancing a home is a serious endeavor. Having the right mortgage broker at your side can make or break your experience. So, do the necessary research, find the right broker, and do your financial future a favor.
About the Author: Jane Smith is a freelance blogger and writer for backgroundcheck.org and various other websites. In particular, Jane likes to offer insight and advice about managing your online reputation, setting career goals, and making smart financial choices. She welcomes you to email her any questions or comments and can be reached at firstname.lastname@example.org.