If you are looking for a home loan, you have some options when deciding how to start the search. One way is to call or visit individual banks, savings and loans, and credit unions. The other is to use a loan broker.
Loan brokers are like matchmakers. They take your financial data and try to match you up with a lender who can offer you the best deal.
But the days of using a loan broker may be coming to an end. Some banks, the most recent being JP Morgan Chase, have decided that they will no longer accept loans submitted by loan brokers. If you want a loan from Chase, you will need to apply directly to the bank.
Banks claim they are doing this to keep tighter controls on the truthfulness of the application. Since loan brokers only get paid if the loan is funded by the bank, the broker has every incentive to make sure the applicant looks as strong as possible. And some banks claim that brokers have misrepresented the borrower's information in order to get the loan approved.
In addition, the larger the loan amount, the more the broker gets paid. So there have been allegations that brokers steer borrowers into unnecessarily large loans.
But loan brokers insist that the limitation on loans submitted by loan brokers is being done so the banks can cut costs and more easily cross-sell products to borrowers.
Whatever the reason, this will result in fewer options for borrowers and more loan brokers closing down their businesses.
Loan brokers are like matchmakers. They take your financial data and try to match you up with a lender who can offer you the best deal.
But the days of using a loan broker may be coming to an end. Some banks, the most recent being JP Morgan Chase, have decided that they will no longer accept loans submitted by loan brokers. If you want a loan from Chase, you will need to apply directly to the bank.
Banks claim they are doing this to keep tighter controls on the truthfulness of the application. Since loan brokers only get paid if the loan is funded by the bank, the broker has every incentive to make sure the applicant looks as strong as possible. And some banks claim that brokers have misrepresented the borrower's information in order to get the loan approved.
In addition, the larger the loan amount, the more the broker gets paid. So there have been allegations that brokers steer borrowers into unnecessarily large loans.
But loan brokers insist that the limitation on loans submitted by loan brokers is being done so the banks can cut costs and more easily cross-sell products to borrowers.
Whatever the reason, this will result in fewer options for borrowers and more loan brokers closing down their businesses.
No comments:
Post a Comment