How to Hire a Qualified Mortgage Broker

When buying a house, there are times when using a mortgage broker would save money.  This professional has an advantage over traditional lenders in that instead of having only a few loan options and interest rate choices for each loan, the broker works with multiple financial institutions.  Therefore, this professional would be able to offer loan options from up to 40 different banks, which means having far more options, as well as more flexibility regarding interest rates.

When buying a house, there are times when using a mortgage broker would save money.  This professional has an advantage over traditional lenders in that instead of having only a few loan options and interest rate choices for each loan, the broker works with multiple financial institutions.  Therefore, this professional would be able to offer loan options from up to 40 different banks, which means having far more options, as well as more flexibility regarding interest rates.

If you think that a mortgage broker would be beneficial for your situation, it would be essential to learn things the things to look for so ultimately, you hire the best person for the job.  Keep in mind that in addition to using a mortgage broker when buying a new home, this professional would also be helpful if you wanted to refinance an existing mortgage loan.  Obviously, the purchase of a home is a major investment, one that if done right could end up being a nice nest egg for retirement.  Because of this, the loan would need to be handled appropriately.

For starters, make sure you talk to several mortgage brokers so you have the ability to make comparisons.  A true professional would be happy to answer your questions and provide whatever guidance were needed but if you were met with a broker who became pushy, you should probably move on.  Any type of strong arm tactics used by a mortgage broker should be a red flag that for some reason, this person is desperate for your business, which is not a good thing.  You also want to be wary of any broker that makes exaggerated claims such as locking you into an extremely low interest rate, one far below current standards.

The easiest way to interview several potential mortgage brokers would be the same as if looking to hire an attorney or choose a doctor.  You have the right to ask as many questions as wanted and if the broker were honest and someone who works from a position of integrity, he or she would be more than willing to walk you through a number of scenarios and make sure you leave the interview feeling confident in that person’s ability.

Now, once you have decided on the mortgage broker that you want handling the search for the best mortgage loan, be prepared to answer his or her questions.  For example, this person would need to determine whether you would qualify for a home loan and if so what type, and for how much.  Therefore, you would need to provide the broker with the location of any property interested in buying, if you have already been house hunting, as well as the approximate value, if known.

If you were looking for a mortgage broker to help refinance an existing home loan, this person would need to know the balance on the mortgage, as well as if the loan has any prepayment penalties incorporated in the contract.  Along with this, the broker would need several other pieces of information to include the following:

•    Amount of real estate taxes
•    Employer’s name, address, and phone number
•    Years employed with the employer
•    Amount of gross monthly income
•    Current mortgage payment
•    Amount of homeowner’s insurance

In the case of homeowner’s insurance, a reputable mortgage broker would determine if any escrow has built over the years.  Additionally, the broker would likely ask if you receive any other income such as child support or alimony, whether you pay out child support or alimony, and whether you have any other assets other than the home.  For this, assets would include savings accounts, checking accounts, money market accounts, certificates of deposits, stocks, bonds, retirement funds (IRAs, 401Ks, etc) and so on.

To ensure the mortgage broker goes beyond the call of duty in locating the best loan for you, the best thing you could do is be honest about everything from day one.  As an example, if your credit is less than perfect, let the broker know.  With this, the broker would have a much better idea of the type of loan you would need and the best lender to go to but this type of exposed information would also save his/her time, as well as yours.  That way, if the broker were unable to help you this time, once you were able to get your credit in better shape, you could go back to that same broker and ask for assistance.

In addition to the above, you want to make sure the interest rate being quoted is the lowest you would qualify for and whether the interest was quoted with discount points.  Finally, if you end up with an Adjustable Rate Mortgage or ARM, although a Fixed Rate Mortgage or FRM would be better, make sure you know how often and at what rate interest would adjust, if there were a maximum yearly adjustment, and what the cap on the interest rate would be.