Mortgage Broker: a 21st Century Master of ‘Magic’

Magic had fooled a lot of people since the earliest of days. This art of deception lives up to this day, practiced by modern masters of deceptions. The difference as to how this art is practiced today by modern ‘magicians’. And we’re not talking about clowns and other entertainers whose sole intention is to please people. What we’re referring to can be a businessman, a scammer, a vendor, or simply an erring broker.

A mortgage broker earns by helping consumers find the mortgages that match their circumstances. However, there are those who intentionally deceive people because of profit. The boom in market competition has created intense pressure on the part of lenders and brokers to attract customers who desire to get a good mortgage that would allow them to fulfill their dreams of having a home.

To avoid falling prey to these dishonest predators, here are some common signs that you need to watch out for. Although these aren’t always indicative of dishonest trade, you should still keep your heads up.

1. Waived Application Fees

Most people who hear about waived application fee are prone to thinking that maybe the lender making this offer bears goodwill by giving affordable and more accessible loans. This ploy conditions the mind into thinking that if you the application fee and then withdraw your application later on, you lose money. But the truth is that the definition of application fee varies per individual—those who are aware and those who have no idea. Only a small number of lenders in general collect application fees, which are paid only once the customer proceeds with the loan.

2. ‘Limited Time’ Low Variable Rate Offers

This one’s a cliché and most people hearing about this would be very tempted to take the bait and get a loan to avail of the limited time offer. This scheme is usually done after the Reserve Bank changes its target cash rate. Known as ‘holding back’ in industry terms, those who practice this trick are simply attempting to look very competitive in the eyes of unsuspecting borrowers. What they don’t realize is that after a certain period of time, the borrower will be back to paying the real mortgage rate. The worse thing that could happen is the occurrence of multiple rate fluctuation couple with high early-exit fees to prevent borrowers from switching lenders.

3. Absolutely No Fees

One of the most popular tricks in the book, this is only a ‘verbal offer’ most of the time which means it’s not part of the fine print. Despite the myriad of people who claim that loans with no fees are real, there’s really no such thing. But if in the most unique of circumstances that you encounter one, pay close to the mortgage rate. That’s usually where the catch is. Of course, a dishonest mortgage broker won’t tell you about it so it is up to you to find out.

Crowin Smith - About Author:
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