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.
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.
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.
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?
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.
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.
in the news:
“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.'”