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What You Need To Know About Mortgage Brokers

What You Need To Know About Mortgage Brokers

For those who are completely new to the mortgage field, this article covers the basics. A mortgage occurs when a property is charged by a creditor as debt security.  Mortgages are popular in the banking industry today and they influence interest rates because of their importance. Mortgages are paid off over a long period of time, in many cases over a thirty-year period. Despite the fact that they are paid over a long period, mortgage charges take up a significant part of the monthly salaries of most people.

What is a mortgage broker?

Having established the ideology of what a mortgage is about, it’s important to know what mortgage brokers are. A mortgage broker is an intermediary that negotiates mortgage loans for individuals, groups, and business organizations. A mortgage broker may either work on behalf of a bank or lending institution, or be independent. In many cases after mortgage brokers working on behalf of institutions have obtained vast experience in the field, they move on to become independent mortgage brokers, otherwise known as private mortgage brokers.

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How are mortgage brokers paid?

Although mortgage brokers can be paid in a variety of ways, in most cases they are paid by the lenders. Consequently, this implies that they offer services free of charge to their clients. While many brokers are paid by their lenders, other brokers charge clients a small fee for their services. It’s important to understand that private brokers can freely set their service prices and preferred mode of payment since they operate independently. When dealing with mortgage brokers, it is important to know if you’re dealing with a broker who works with an institution or with an independent broker. Before hiring the services of a mortgage broker, ask questions about fees and payment mode. This is especially important if you’re transacting with a private broker.

Like other businesses, there are some downsides to note when transacting with corporate mortgage brokers. The major downside is that they do not have access to funds being requested as fast as possible, especially in cases of emergencies. They have large numbers of clients to process funds on their behalf and may not be able to process loan requests within a short amount of time. Mortgage brokers working for financial institutions typically have less experience. Conversely, independent mortgage brokers have acquired vast experience and can process loan requests much more speedily. This experience helps them bypass undue hierarchies, prepare paper work, and present loan requests to the right bank official directly and get prompt response after the loan request.

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What advantages do independent mortgage brokers have over corporate mortgage brokers?

Independent mortgage brokers have a very unique edge that makes them very proficient in service delivery. One advantage of using independent brokers is the array of information and deals to which they have access. Because they transact with multiple lenders, they are well connected and have in-depth knowledge about the ins and outs of brokerage service. It is safe to say that the independent broker is connected to a large number of lenders; some are connected to over twenty lenders. This variance gives you alternatives and the ability to make choices that suit your best interests.

This makes the services of an independent service unique and worth potentially several thousand dollars depending on the property value for which a mortgage is being sought. For example, a mortgage of $100,000 at about 1% lower interest rate over a thirty year period saves $30,000 depending on when interest on the principle amount is recalculated.

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In the mortgage industry, mortgage fraud is a cause for concern and there’s need to determine credibility before transacting with a mortgage broker. In the United States for example, the credibility of a mortgage broker can be easily ascertained by checking with the Better Business Bureau (BBB). The BBB provides business ratings so you can get detailed information about the proficiency, history, and other important business accreditations of a mortgage broker. In other countries similar organizations provide similar services and you can look up information on any mortgage broker of your choice and even read reviews about them if they have functioning websites.

Things a Mortgage Broker Does for You that a corporate broker cannot:

  1. Wide scope of honest advice

Trained corporate brokers are limited compared with independent brokers, and corporate brokers only have knowledge about the institution they represent. An independent broker has vast experience and offers varieties of options that best meet your interests.

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  1. In-depth education

Your mortgage broker’s job is to help you understand the different mortgage products that are available for your credit and income level. Your broker can help you develop an action plan so that even if you don’t qualify for a better mortgage now, you’ll be able to get a better rate after implementing the plan.

  1. Help negotiate preferential transactions

Corporate brokers are not hinged on fixed rates; they can help you look into your financial records and help determine the right lender and rates to apply for. A corporate broker may help you in securing lower rates, but you don’t have valid guarantees that these reductions won’t be cancelled out by hidden fees. Independent brokers know the loop holes, can identify pitfalls and hidden clauses in paper work, and help you save lots of money in the long run.

Featured photo credit: Sherissehume via sherissehume.com

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Last Updated on April 28, 2020

9 Millionaire Success Habits That Will Inspire Your Life

9 Millionaire Success Habits That Will Inspire Your Life

As technology evolves and information becomes more accessible, it has also become more challenging to define success. A lot of people are trapped in the rat race while trying to discover the actual formula for success.

You could become overwhelmed with what tools, techniques or philosophies to imbibe while trying to get tips over the internet. At every click and turn, there are ‘how-tos and quick-fix’ on how to become successful overnight. You will find several courses, articles, videos and books on how to achieve financial success.

But what if I tell you it doesn’t have to be complicated as people made it out to be? What if you could achieve success by merely following these 9 millionaire success habits?

1. Read for Personal Development

A daily habit I have discovered millionaires share in common is reading. For instance, if you are an entrepreneur, you need to read to become an efficient leader and a productive business owner. Reading helps you to grow and learn without going to a business school.

A research conducted by Thomas Crowley indicates about 85% of self-made millionaires read at least two or more books each month. [1] Warren Buffett is one of these examples. He spends 80% of his day reading. In the early days of his investment career, he would read 600 to 1000 pages in a single day.

While millionaires sometimes read for pleasure, they also learn to improve themselves. They read topics on leadership, how-tos, self-help, biographies, lifehacks and also follow current events.

Here’re some recommendations for you: 25 Best Self Improvement Books to Read No Matter How Old You Are

2. Establish Multiple Sources of Income

Another success habit I noticed about successful people is that they don’t depend on a single income source. Every millionaire possesses multiple sources of income. This helps them to manage economic challenges and also make more money.

They are passive income addicts. They earn interests from loans, rental income from real estate, royalties from intellectual properties, dividends from investments. They also launch a side business or run a website or sell information products.

How income is made either passively or actively is what separates the successful from the wannabes. They are always learning ways to build multiple streams of income.

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3. Live on a Stipulated Monthly Budget

An average millionaire does not believe in luck and jackpot. They take the time to understand cash flow-income and expenses. Based on this, they establish a monthly budget and religiously stick to it.

The essence of the budget is to minimize unnecessary expenses. This will help you gain complete control of your financial life. Budgeting helps you to avoid overspending to achieve your financial goals. Here’re some tips to help you stuck to your budget: 32 Hacks for Sticking to Your Budget

4. Manage and Maximize Money

The most significant education for a millionaire is financial intelligence. Nobody attains financial freedom without gaining financial intelligence. This is the more reason millionaire, regardless of their income, keep their knowledge about tax strategies updated.

They always seek to reduce their tax bills. One approach they employ is by living or incorporating their business in states with no income tax.

Do you know that about 60 companies paid $0 legally in the 2018 tax year? Some of these companies that ‘avoided'(note: not evaded) federal income tax include Chevron, Amazon, Halliburton, General Motors, Delta. Their US income was totaled at $79 billion with an effective tax rate of -5%.

What’s the deal? They got a tax refund.

How do they accomplish these?

An ITEP report indicated that they have the culture of throwing huge sums at tax experts who assist them in discovering creative, as well as convoluted means of paying little tax as much as possible.[2]

5. Avoid Debt

Another habit that separates the millionaires from the rest of the world is how they manage debt.

They don’t live an extravagant lifestyle; instead, they only buy what they need and can pay for. They do not book hotels and flights by using their credit cards to pay for them.

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They are conscious of the interest rates even when they use credits cards or take loans. If possible, they try to pay with cash because of its zero percent interest rate.

6. Set Daily Goals

It does not matter if they are setting up a business, a career, or financial projections; they have the success habit of setting short term goals. They plan daily and weekly goals to generate momentum in achieving their long-term goals.

Ensure you prioritize when setting daily goals. This will help you to achieve the most important to-dos on your list.

Setting priorities will help you to focus on highly rewarding activities. If you desire financial freedom, it is wise to pursue activities that earn you thousands of dollars rather than hundreds of dollars.

7. Don’t Act Rich

The goal is not to act rich but to be productive. Interestingly, Thomas Stanley buttressed in his book that for the most prestige brands of cars, about 86% percent are toys of the non-millionaires. While most believe that people with huge fortunes tend to drive exotic cars, in reality the largest consumers of pricey cars are aspiring millionaires.[3]

According to findings by Experian Automotive Researchers, 61% of individuals who earn $250,000 or more rarely buy luxury brands. Instead, they buy Hondas, Toyotas, and Fords like the rest of the world. The reason is they are not ready to spend money on premium cars that tend to drop in value in a couple of years as it would cost money. Millionaires invest in assets that appreciate.[4]

8. Own or Buy Businesses

In Robert Kiyosaki’s cashflow quadrant, he divided how you earn income into four quadrants. The E and the S quadrants take the left position while the B and the I are on the right side. According to Robert, it is possible to be on all quadrants, but the millionaires are not.[5]

  • E stands for employee – they work for others
  • S stands for self-employed – they work for themselves
  • B stands for a Business owner- employees work for them (500 or more employees)
  • I stand for Investors – Money work for them like Warren Buffet.

Your goal is to move from the left quadrant to the right quadrants where you own big businesses or make money work for you.

It is possible to become financially successful by pursuing what you love. For instance, if you love writing, aspire to be the best seller. Wealth and passion work together.

Check out How to Start a Small Business with Little to No Money for tips.

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9. Avoid Get-Rich-Quick Scheme

A millionaire holds patience as an essential virtue. It takes patience to become successful, not only in finance but in every aspect of life. While it is possible to become financially successful at an early age, most millionaires hit it at age 50. They live a moderate life, invest in their future and retire rich.

Bonus: How to Develop the Millionaire Success Habits?

Having learned these habits, the next question is,

How can I develop the Millionaire Success habits?

Here are six values you will need to develop:

Establish Your Life Vision

You need to be clear about what you want in life to set yourself for a life of success. Your vision has to go beyond becoming a millionaire to understanding why you want to become one. Any great entrepreneur you will ever find has a clear vision and an established mission.

Understanding why you are doing what you do will drive you to become the kind of successful person you want to be.

Make Your Passion a Profession

When your passion becomes your profession, work becomes pleasurable. Loving what you do enables money to flow to you and through you.

So what’s going to be? Wake up every morning by speaking positive words into your work, love what you do, and focus on the work that brings you joy.

Take a look at this article and learn how to make it happen: 5 Steps To Turn Your Passion Into A Career

Focus on Solution

Focusing on the solution means establishing the problem that you or your business address. This will help you focus on the solutions when others are faced with challenges.

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A millionaire has a mindset that is fixed on the solution. He or she knows there’s a way out, and that every problem is an opportunity in disguise.

Improve your problem solving skills with these tips: 6 Effective Ways to Enhance Your Problem Solving Skills

Develop Your Leadership Skills

Leadership skills are an asset that is indispensable if you want to develop a millionaire success habit. The more you hone your leadership skills, the more you will attract leaders who share your values.

Be Growth-Focused

Millionaire entrepreneurs prioritize self-improvement. Here’s how to achieve it:

  • Get a coach. Coaching will impact your life, and you will achieve peak performance in life and business when you have a life coach.
  • Be coachable. It is not enough to have a coach; you must be coachable. Sometimes, you need feedback and counsel to reposition your life and business. A coach has the wisdom and experience to counsel you from a higher perspective. The more you receive feedback and work on yourself, the more you become better at what you do and who you are.

Flip Your Thought Pattern From Acting To Being

It is not enough to have a millionaire success habit, you must also become a person of positive influence. This is how you can become significant. Bill Gates is not only rich; he is changing lives in Africa and different parts of the world.

If you want to become successful, you must first be and think like a successful person. This is how resources you need can flow into your life.

Here’s a final thought from me:

It is not enough to do something to have something; success is about being someone who possesses what is needed to take positive and inspired actions.

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Featured photo credit: Austin Distel via unsplash.com

Reference

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