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Financing, Mortgages and Insurance What options are best for you and your situation?


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  #1  
Old 2013-03-15, 12:20 PM
Carlisle Carlisle is offline
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Default Urgent!! Mortgage Brokers and Rates - Question

Hi All,

I am in a bit of a predicament.

We signed commitment papers with a lender a month ago. In those same papers was a broker specific paper saying that if for whatever reason the mortgage does not go through/or get funded, we must pay the broker whatever their commission would have been plus any additional fees.

Since signing, we have found out that there are other brokers out there offering us the exact same product from the same lender, but at lower rates (.20 lower). We have a fairly big mortgage, and the lower rates means a lot of savings of interest over the 5yr term.

So, what are we to do? Our broker says those other brokers are cutting their commission to get us the lower rates, and that he will not do this. Shouldn't we have the right to shop around for the lowest rate until the end?

I dont think it is fair that we had to sign that paper. He didn't even explain what that paper was when we signed it....

Open to advice here....
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Old 2013-03-15, 02:53 PM
oakvillehomeowner oakvillehomeowner is offline
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Quote:
Originally Posted by Carlisle View Post
I dont think it is fair that we had to sign that paper. He didn't even explain what that paper was when we signed it....

Open to advice here....
aside from the obvious (don't sign what you don't understand), you may be able to contact his regulatory organization if you feel you were misled.
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  #3  
Old 2013-03-15, 03:01 PM
mortgagejake mortgagejake is offline
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Join Date: Jan 2013
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Quote:
Originally Posted by Carlisle View Post
Hi All,

I am in a bit of a predicament.

We signed commitment papers with a lender a month ago. In those same papers was a broker specific paper saying that if for whatever reason the mortgage does not go through/or get funded, we must pay the broker whatever their commission would have been plus any additional fees.

Since signing, we have found out that there are other brokers out there offering us the exact same product from the same lender, but at lower rates (.20 lower). We have a fairly big mortgage, and the lower rates means a lot of savings of interest over the 5yr term.

So, what are we to do? Our broker says those other brokers are cutting their commission to get us the lower rates, and that he will not do this. Shouldn't we have the right to shop around for the lowest rate until the end?

I dont think it is fair that we had to sign that paper. He didn't even explain what that paper was when we signed it....

Open to advice here....
You can go a bunch of ways here. First, you may ask your broker to send you the exact wording of the Letter of Exclusivity he asked you to sign, and contact your lawyer asap as to whether the language is sufficient and it'll hold up in court. Second, you may also tell your broker that you have gotten the following quotes and advise him to move the deal to match the rate. If you want to email me what rate you got from which lender I can tell you what other rates exist with and without buying down commission - some lenders don't allow for an existing client to "float" a rate down whereas others do.

kubatron@gmail.com is my email

third, figure out how much you're borrowing and multiply it by about 1%, that's how much he'll get paid on a standard five year term. now compare it to how much you will save elsewhere. if you save MORE than what the 1% represents then I would say, move the deal! Tell him you'll gladly pay his commission because the .20 represents MORE savings in terms of per month AND end balance AND interest.

And fourth, I can bet you my life that he explained what you were signing. If he did not then you MAY have a case, but try proving he didn't because your signature is on that paper. So it's his word vs yours.

Finally what stupid broker would risk their rep taking a client to court. If it happens - then it's his loss. It'll be small claims court anyways.

Send me the exclusivity agreement if you wish.

And read what you write.

Here to help!

Jak
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Old 2013-03-15, 05:05 PM
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good2know good2know is offline
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firstly what rates (percentages) are you speaking of here?

secondly, some of those discounted mortgages come with terms and conditions that I would not accept ... is that what you are comparing against?

if rates have come down, the lender should match it - don't most give you the lower of when you signed vs possession date?

the time to finish all the negotiations of course is before signing anything commiting you to the deal ... knowing now that someone could have done a better deal is too late
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