Picking a Mortgage Broker
The key to getting the best financing for your home purchase is to use a mortgage broker to shop the various loans available. Before you can do that, you need to know how to pick one.
A mortgage broker is an independent loan professional. Put another way, he or she is not affiliated with a particular lender. Instead, the broker helps clients shop are large number of lenders for the best loan rates. This can be particularly helpful when finding wholesale lenders that do not deal directly with the public. Regardless, using a mortgage broker versus a lender is similar to shopping for a new car across a variety or dealers versus just going to one dealer and hoping not to get skinned alive.
While a mortgage broker can be a key ally in finding a good loan, you obviously need to pick the right broker. As with any profession, there are excellent brokers and ones that are not so great. Here are a couple of points to raise when you interview brokers.
Variety of Lenders You are going to a broker to get the best deal. This means the broker needs to shop the loan across a wide variety of lenders. Ask the broker how many lenders he or she works with. Also ask the broker which lenders accept his or her business and which do not.
Alternative Loan Proposals A good loan broker will never try to force feed you a particular loan. Instead, they will discuss your situation with you and then suggest a few proposed loan programs. At this point, a quality mortgage broker will also prepare a profile of the different loans and how your payments, interest rates and so on would look with each loan. All loans have benefits and drawbacks, so you want to be able to evaluate different proposals.
Staffing A mortgage broker is not done when they find you a loan. They are responsible for submitting the documents and dealing with the lender if there are any questions or problems. Essentially, the broker is responsible for handling the paperwork and red tape. A quality broker will have an assistant and processor to help stay on top of your loan. He or she should be willing to identify them to you, even introduce you.
As weird as it may sound, there is one final area that you need to ask about. Will the broker give you his or cell phone number? Most do, but some dont. If a broker refuses to give you the number, move on. It is a very bad sign.
Sergio Haros is with Great Western Mortgage - mortgage brokers providing home loans.
