Boston Mortgage Lenders

Doing Your Homework

While you want to be able to rely on your mortgage lender for advice, you also have to be well-informed before you start shopping around. Armed with knowledge, you can weigh your lender's advice more competently; is the representative you're dealing with guiding you toward what will work best for you, or what will earn the lender the most money?

How Much Mortgage Can You Afford?

The cost of living is high in Boston and a Boston mortgage lender can help you determine what your monthly living costs are likely to be in certain neighborhoods. This is a great help if you're moving into the state from another area. There are various kinds of free mortgage calculators on the web that can assist you in making other calculations based on your income, current mortgage interest rates, and your down payment.

Advantages and Disadvantages of Types of Loans

• Adjustable rate mortgages usually start with tempting low interest rates that have the potential to increase later. If you expect to pay your loan off early these can be a great deal, but you can also get stuck later with an interest rate outside your budget.
• Fixed rate mortgages provide the security of knowing exactly how much you'll pay through the life of your loan, though the interest rates are usually higher than adjustable rate mortgages.
• Interest only mortgage loans start with paying only the interest on a loan, rather than any of the principal, usually for a period of a three to seven years. This kind of a loan means smaller payments to start out with, but if you have to refinance to avoid penalties for not paying in full after that initial period they can force you into refinancing at higher interest rates.

Finding a Mortgage Lender

The best way to find the Boston mortgage lenders who will meet your needs is to ask for recommendations from the people you trust. Friends, colleagues, or networking websites can be great resources. Check to see if your current bank or credit card company offers mortgages because they often have preferential rates for existing customers.

The Massachusetts Mortgage Bankers Association list of members doesn't include every Boston mortgage lender, but it's a good start. The list of affiliate members includes many of the major title companies and real estate attorneys in the Boston area. Membership in the association doesn't guarantee quality or honest business practice, of course, but members must be recommended by two existing members and certify that their license has never been revoked and that they follow the association code of ethics. On March 30, 2007, the association expelled three sub-prime lenders for controversial practices and had previously expelled another.

Solving Problems with Boston Mortgage Lenders

Massachusetts state law regulates all Boston mortgage lenders as well as mortgage brokers, regardless of whether they have a physical office in Boston or not. Certain practices specifically forbidden under the state laws include:

• Bait advertising, or a lender or broker offering a rate they do not intend to honor but just use as a hook to get the mortgage customer to purchase a more expensive product
• Terms that are not listed “clearly and conspicuously,” such as the proverbial fine print or type that appears on a television screen too quickly to catch
• Advertising “instant approval” or “instant closing”
• Using terminology such as “bad credit no problem” without clearly specifying the specific terms that apply to people with poor credit histories
• Using terminology such as “avoid foreclosure” without clearly specifying the conditions of the loan, including the fact that missing a payment or payments can still result in foreclosure
• Mortgage brokers failing to notify the borrower of the fees they charge
• Charging interest rates that significantly differ from the standard industry rates

If you believe that your Boston mortgage lender has violated these regulations or engage in any other unfair or deceptive practices, the Office of Consumer Affairs has a hot line specifically for mortgage fraud: Call 1-800-495-2265 extension 1501, or you can submit a question or complaint online.