Upfront Mortgage Broker Commitment Fees legit?

Question

Found a local mortgage broker encouraging me to sign a full service agreement with them that will charge a 1.5% fee for every deal and wants a $5k commitment fee upfront. This was explained to me it helps drop the commission by 50% for life and for every project moving forward.  This commitment fee will open the doors to a 10X program where you have $50k in an account for a line of credit for $500k.

Any lenders out there offering the same line of credit without the commitment fee?

Are others seeing this as a scam or more of a commitment of their services well known in the industry from other mortgage brokers?  Not liking the whole upfront fee scenario as this will be the my first opportunity to open the doors and minimize out of pocket expenses. Any feedback would be greatly appreciated.

Keith C. · Answer

@Dustin Hughes stay away from that outfit , There is no legal grounds for any upfront costs other than Credit Check and Property Appraisal when ready. Id be happy to look at a Property loan. I only do home loans and not line of credits currently.You can PM me ,

Dustin Hughes · Answer

@Jared Rine that's exactly what I did.... couldn't believe that was my first run in with a broker while searching.  Followed my gut instinct and listened to other lenders advice like yourself.  Thanks for your response.

Moving forward now.

Stephanie P. · Answer

There are lines of credit out there that essentially provide easier access to short term financing, but the up front commitment fee the broker quoted you  is way high.

Stephanie

Dustin Hughes · Answer

@Scott Mac thank you for your feedback.  We decided to look elsewhere.  Across the board it seems as if this is frowned upon and other brokers recommended to run.  Advice was taken and finally found a lender willing to work with us without the additional upfront costs.

Scott Mac · Answer

Hi Dustin,

OPEN THE DOOR, seems like sales fluff talk. It means nothing.

Pay $5,000 to "Open the Door" and you have bought a black box of whatever the seller wants to provide (a paper application handed to you from a lender, a website address, etc...)

When buying something like this and "Sales Fluff" is introduced into the conversation (vs. hard facts such as, a line of credit will be set up for $X 90 days after doing Y with Z lender, etc...) there is unusually a reason for the "Sales fluff".

Ask for a copy of the contract and take the time to read it to see what you would actually get for your $5,000, and if the contract has "Sales fluff" in it--Buyer Beware.

If there is no contract, or they balk at giving you an opportunity to read it (pressure you into signing now), it might not be such a good deal for you.

And Sales fluff may be a red flag about other parts of the "Opportunity" also.

Good Luck!

Jared Rine · Answer

@Dustin Hughes...run away from that all day, every day.

Shaun Weekes · Answer

RUN as far away from that Broker as possible!!!

Upfront Mortgage Broker Commitment Fees legit?

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