A mortgage broker is someone who serves as a go-between for the prospective buyer and the actual lender. They will not be the one who actually services the loan, but rather someone who helps the buyer find the right loan for them. Choosing the mortgage broker who can best help you is very important. Here are some things to look for when choosing one.
Difficulty: Moderately Easy
Look for one who is accredited. This will help you to know they are properly trained in this field. This also means they will have to adhere to a strict guideline that is designed in your best interest.
Look into how many sources of loans they are going to be looking for. Some mortgage brokers only use a couple of lenders for their loans, while others will look at 10 to 20 different possible lenders. The more lenders that a mortgage broker is willing to work with, the better your chances of acquiring that loan will be.
Look at how a mortgage broker gets paid. Some will not charge you anything for their time because they will get a commission from the lender. You must be careful, though, that a large commission does not cloud their judgment. Others will charge a small service fee for their time. They would get this in addition to any commission the lender would pay them.
Find out if they have professional indemnity insurance. This is very important. This insurance covers them if they are sued for any reason, such as being negligent in their pursuit of a loan or not holding to their professional guidelines.
Ask the broker exactly how they compare loans and how they will determine which is the best one for you. If you are comfortable, ask them for references and follow up on that. Find out how satisfied others were with both the service from the mortgage broker and with the outcome of their loan.
Tips & Warnings
- Don’t be afraid to ask lots of questions. Mortgage brokers are very good at explaining how everything works. If you don’t understand something, ask. Interview several mortgage brokers before choosing one to work with. If their personality does click with yours, it will be more difficult to work together.
- When you are comparing different mortgage brokers, ask to receive a list of all the applicable fees and closing costs up front. This way, you can see what each individual broker is going to charge in the end and you can steer clear of those that are going to charge you considerably more than others.
- You don’t need to restrict your search to local mortgage brokers. Through the internet, you can look for other brokers and may be able to find a better deal. Make sure you check any broker you are considering with the Better Business Bureau before choosing them. This will help to protect you in the long run. If you can’t find any further information, don’t take the chance.