Consumers Helping Consumers

Mortgage Broker Tried Pushing Me Into a Higher Cost Loan
Chris N., Chemical Salesperson in Pennsylvania

I live in Macungie, Pennsylvania and was looking to purchase a home.My wife and I did not have a lot of money for a down payment, about only five percent of the amount of the home we were going to buy, depending on how much closing costs would be.We had heard of a special method for saving interest by actually getting two loans instead of one loan to save on interest expense.The mortgage broker we were dealing with insisted that one loan for the entire loan balance would be the best way to get a good interest rate.He convinced me that one loan would be the way to go and I pretty much trusted him on it.

Two weeks later, I decided to discuss my home loan needs with another mortgage broker who I just happened to run into at a party.He later quoted me rates on two loans that totaled the amount that I needed for my loan.This second method saved me much more money, but I felt that I was almost duped by the first mortgage broker.I don't know why the first one insisted on one loan, or if he just wasn't that experienced.Even though I think I did better in the end, I still felt that I almost ended up paying a lot if I never happened to run in to the other mortgage broker.I think that the first mortgage broker knew that my wife and I were first time home buyers and this was our first time in the home loan process.

Equal Home Finance Bureau Comment: What Chris discovered is common to many home buyers. Mortgage professionals vary greatly in experience and honesty, unfortunately, and many people feel hurt after trusting one person to help them. You were lucky that you did some homework upfront to know that "two loans are sometimes better than one" and that you happened to meet another mortgage broker. Many people aren't so lucky.

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