Some Broker Advice

Here is a funny article written by a mortgage broker at SB Wire. You would think it would have been published on April 1st with the first piece of advice given. Actually the rest of the advice is quite useful, even if it just a reminder.

* You should get a significantly lower rate for refinancing to make sense. Don't rush to refinance unless it's truly worth your while. If you're working with a mortgage broker rather than going it alone, you can be assured that they're bringing you the best offers out there. If you're going it alone, you'll have to do the legwork for yourself.

It is not like the broker will be looking to see which loan gets the highest commission. No, they are only looking out for the customer's best interest not their own bottom line.

* Consolidating unsecured debt with a refinance loan can be a dangerous idea. You may not be in financial trouble now, but if in a few years things change, instead of simply missing a credit card payment or two, you'll now be in danger of losing your home as well.

Actually this is excellent advice - so many people just trade in their credit card bills for a Refi or HELOC changing unecured debt for secured debt. While the payments may be lower in the short run this is because your house is now the collateral and you are most likely paying it over a 30-year installment plan.

Remember the restaurant you ate in last year let alone 30 years that you are still paying for. Or the clothes purchased 6 months ago but still in the closet with the tags still on because you changed your mind. Using your equity to pay for these things means you are still paying off those expenses 30 years later.

* Your credit score counts... big time. If you've had credit problems in the past like a bankruptcy, it might make sense to wait a while for your credit score to recover before trying to refinance. Most lenders make it hard for people with less than perfect credit to get the best deals. But, again, if you choose to let an expert like a mortgage broker get involved in the process, they can often find loan options that most homeowners didn’t even know existed - which can save you thousands over the long haul.

When you are in this predicament you may be better going to a credit counselor rather than a mortgage broker. Most people are only taught how to understand their financial choices from their parents. If your parents had problems or did not know what they were doing it is most likely you will be in the same boat.

One can going to cooking school almost everywhere but there are few budgeting or financial management schools. For business yes, but for personal issues the choices are limited. They are also usually limited to people who are trying to sell you something - a course from a broker or financial planner looking to pick up new clients. Sure one can go to a financial planner - but most often you need to have significant funding to walk through their doors.

We should have some kind of organization that helps people prior to getting into trouble. Going to debt counseling should not be limited to those filing bankruptcy - it should be a service that is offered to everyone. Courses on managing checkbooks, planning and sticking to a budget, and living within one's means all sound common-sense and logical but are very, very difficult in real life.