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Mortgage Broker Liability: Assisting First-Time Buyers
Posted on: March 18, 2016 by Newmark Insurance
As a mortgage broker, one of the most important steps is to gain the trust of your clients. As they are making one of the biggest financial decisions of their lives, your expert guidance and recommendations are a necessity. Especially as first-time buyers, they are most likely not familiar with the jargon and the complete list of requirements for home buying. This is where you come in. As a real estate professional, it is your responsibility to advise your client on everything regarding the closing of a home. As such, ensure you are secured with Mortgage Broker Professional Liability policy.
One of the most common issues that first-time homebuyers face is not knowing the right questions to ask about the right loan and interest rate that works for their situation. It is up to the mortgage lender to explain the difference between variable interest rates, fixed interest rates, and the life of the loan. For example, be sure to explain to your clients what the difference is between a 15-year loan at a fixed 3.75% interest rate and a 30-year mortgage 4.25% rate.
These decisions will make a significant difference in their interest paid, the equity they accrue, and the monthly payments they will be required to make. Be thorough in your explanations and be transparent with your clients about which option is best suited for them.
Consumers should be educated on interest rates as well as the types of loans available, closing costs, and other possible fees, recommends Consumer reports. However, as experienced or naïve as the homebuyer may be, it’s imperative that you go over the fine print in the mortgage lending process to prevent exposing yourself to a variety of legal actions.
Whether your client is ready to sign on the dotted line or shopping for options, it is absolutely imperative that you advise them on the right decision. As many millennials are now populating the home-buying market, it’s important to consider their student loans, car payments, credit history, credit establishment, income, and more that will affect the lender’s decision.
At NewMark Insurance Services, we understand the Professional Liability Risks faced by Mortgage Brokers and Lenders, as well as other professionals in the real estate industry. We also write all other liability products needed to operate your business. For more information, please contact us today at 855-777-6549.