Question
What is my mortgage broker's ulterior motive?
My mortgage broker called me up out of the blue and asked if we wanted to refinance (which we already did about two years ago) because the rates were "so low" (I live in Canada). She asked if we needed some money to get a car, renovate etc. I said I didn't think it would be worth refinancing again (although we always need the money) due to the penalty we would get charged, the lawyers fees etc. She seemed to think we would just absorb the penalties because the interest was so worth it. Is she desperate for money and just looking to make a buck or does she really have our best interests at heart? I have refinanced twice already and am never going to pay off this mortgage if I keep it up. help!
10 months ago - 6 answers
Best Answer
Chosen by Asker
She will get money for having you do the refinance. So it is in her interests for you to do so. However, that doesn't mean it might not also be in your best interests to do so. The dropping interest rates may in fact make it worth your while if you plan to keep the house for a while. There are various calculators around on the 'net to help you decide. Bankrate.com has a good one: www ... I would not, however, recommend a cash-out-style refinancing (for extra money for cars or whatnot), particularly if you are already concerned about paying off the mortgage. Don't even roll your fees into the new mortgage if you can possibly pay them otherwise. Also, I would not just take her cold call numbers as the final verdict on the interest rate you can get. Use a site like Bankrate.com to see rates that are available in your area. (And no, I'm not affiliated with Bankrate.com, just happy with their site.)
by enoriverbend
10 months ago
Asker's Rating: 
Other Answers
trying to earn a living. You must do the math and see where your break even point is and then determine if it is the thing to do
by golferwhoworks- 10 months ago
She makes money evertime she can close a transaction. This is simply to put money in her pocket. If you want to refinance and you have a prepayment penalty; you should be able to refinance with the same mortgage company and have them waive the prepayment fee. You really need to look at it this way. If you can't drop 2 points it isn't worth it to refinance. If your credit is good avoid the broker at all costs and go through a bank. That way you have NO broker fees.
by Marilyn R- 10 months ago
It's common but like any advice from someone trying to sell something, it may or may not be best for you. When you refinance, you don't have to stretch it out for 30 more years or whatever. Go for a 15 year mortgage, or maybe a 20 year. If they don't offer that say tough luck. If you stretch it out, you have to have the discipline to pay extra every month or like you say, you'll never get it paid off. I would simply demand that it be profitable for me and would stand firm on that. Of course to know what is profitable you'd have to do the calculations. That's where you either have to learn to do it yourself or trust her math. www.bankrate.com can help you with the calculations. Click on the Mortgage secion then Calculators.
by Boody B- 10 months ago
Please, of course it is not your interests that are of concern to her. In this economy, she has been struggling to close deals. She only gets a paycheck if she closes a mortgage. Yes, the reduced interest rate gives her a better product to sell as there would be no reason to refinance without it. But again, she has to eat, pay bills and this is her job.
by Chris S- 10 months ago
looking to make money. This is why we are in this mess.
by Ralph N- 10 months ago