With the FBI investigating some lending institutions and home mortgage broker, it becomes clear that most brokers do not represent anyone’s interests but their own. Mortgage brokers are regulated by state agencies but are not under any compulsion to get the buyer the best or safest deal. Real estate investors make money by shutting a deal closed for lenders or banks afterward taking the money off the value of the agreement from the lender. You might not see how the broker is getting paid, but he is. Some of these are paying the broker and the lender is paying the others. So studies have shown that mortgage brokers are given a commission to sell you loans with hight prepayment penalties, which makes refinancing difficult.

Mortgage brokers should assess your financial capabilities and try to find a market product that suits your present situation. When they start pushing risky products for you to buy, it can become a problem. You also need to do your own homework in deciding whether any product offered is a good deal or not.

The broker works with a lending institution in providing the paperwork and application forms necessary to substantiate your income and ability to pay the lender. Documents requested may include such things as copies of bank account records, earned income statements (w-2s) and tax returns. Be ready to send all necessary documents to your mortgage broker in order to secure your loan..

If you are not in a position to buy a home because of your income, steer clear of any mortgage broker that fudges the numbers. The numbers are set so that you don’t borrow above your means. Lying on a loan can have serious consequences, both legal and financial. Before you sign the final papers, make sure it matches what you verified to your mortgage loan officer.

Even if you are in fixed rate, you will probably get brokers calling trying to get you to refinance. Keep in mind that they are paid to close deals, not necessarily to make sure you get a better deal than the one you have.

The real estate mortgage broker should also provide you with a good faith estimate and the cost of fees assessed to your loan before you close. Before signing anything at closing, make sure that all paperwork is correct and unaltered, and that no papers are missing.