Checklist Checklist

Category: Money

  • #83 MORTGAGE BROKERS Buyer Checklist You Need To Know Before You Spend Your Money. 40 Buyer-Beware Intelligence Points.

    Financial Information Notice: This checklist provides general educational information only. It is not financial, mortgage, tax, or legal advice. Compensation structures, licensing, loan products, and mortgage regulations vary by jurisdiction.

    “The mortgage broker may help you shop—but you still need to understand what you’re actually comparing.”

    CFPB recommends comparing multiple mortgage offers and Loan Estimates rather than relying on a single lender or quote.

    25 Buyer-Beware Warnings

    1. ☐ Verify licensing where applicable.
    2. ☐ Ask how the broker is compensated.
    3. ☐ Ask who pays the broker.
    4. ☐ Ask whether compensation varies by lender/product.
    5. ☐ Identify the lenders being considered.
    6. ☐ Ask how many lenders the broker actually accesses.
    7. ☐ Request written loan options.
    8. ☐ Compare Loan Estimates.
    9. ☐ Compare interest rates.
    10. ☐ Compare APR.
    11. ☐ Compare points.
    12. ☐ Compare lender credits.
    13. ☐ Compare origination charges.
    14. ☐ Compare cash to close.
    15. ☐ Compare monthly payment.
    16. ☐ Compare loan term.
    17. ☐ Compare adjustable-rate features.
    18. ☐ Compare prepayment provisions.
    19. ☐ Ask whether the broker receives lender incentives.
    20. ☐ Don’t accept “best rate” without documentation.
    21. ☐ Don’t compare different loan structures as if they were identical.
    22. ☐ Get competing offers.
    23. ☐ Ask what can be negotiated.
    24. ☐ Verify all promised terms in writing.
    25. ☐ Don’t confuse broker convenience with lowest total cost.

    Premium Checklist

    Broker Audit

    ☐ License
    ☐ Experience
    ☐ Compensation
    ☐ Lender access
    ☐ Product access
    ☐ Conflicts
    ☐ Communication

    Quote Comparison

    Broker Quote → Loan Estimate → Competing Loan Estimate

    Compare:

    Rate / APR / Points / Fees / Credits / Payment / Cash-to-Close / Five-Year Cost

    CFPB specifically recommends obtaining and comparing Loan Estimates from multiple lenders.

  • #82 HELOC Buyer Checklist You Need To Know Before You Spend Your Money. 40 Buyer-Beware Intelligence Points.

    Financial Information Notice: This checklist provides general educational information only. It is not financial, mortgage, tax, or legal advice. Home-equity borrowing uses your home as collateral and can create significant financial risk.

    “A HELOC can feel like flexible cash—until the repayment period changes the payment.”

    CFPB explains that HELOCs generally have a draw period followed by a repayment period, and payments can increase substantially when repayment begins. HELOCs usually have variable rates, although some permit conversion of balances to fixed rates.

    25 Buyer-Beware Warnings

    1. ☐ Your home secures the debt.
    2. ☐ Don’t assume the minimum payment tells the full story.
    3. ☐ Identify the draw period.
    4. ☐ Identify the repayment period.
    5. ☐ Determine whether the rate is variable.
    6. ☐ Understand the index.
    7. ☐ Understand the margin.
    8. ☐ Determine the rate-change frequency.
    9. ☐ Determine the maximum rate.
    10. ☐ Calculate payments at higher rates.
    11. ☐ Identify annual fees.
    12. ☐ Identify transaction fees.
    13. ☐ Identify minimum-draw requirements.
    14. ☐ Check inactivity fees.
    15. ☐ Check early-termination fees.
    16. ☐ Ask whether the lender can freeze the line.
    17. ☐ Understand what happens if home value declines.
    18. ☐ Determine whether the repayment payment changes sharply.
    19. ☐ Ask whether principal is fully amortizing.
    20. ☐ Understand fixed-rate conversion options.
    21. ☐ Don’t borrow merely because available credit exists.
    22. ☐ Don’t use variable-rate debt without stress testing.
    23. ☐ Compare alternatives.
    24. ☐ Calculate total interest under multiple scenarios.
    25. ☐ Determine whether the debt remains affordable after the draw period.

    CFPB warns that falling behind on a HELOC can put the home at risk.

    Premium Checklist

    HELOC Anatomy

    Home Equity → Credit Limit → Draw Period → Rate Changes → Repayment Period → Final Payoff

    Stress Test

    Calculate payment at:

    ☐ Current rate
    ☐ +1%
    ☐ +2%
    ☐ +3%
    ☐ Maximum contractual rate