How to Find a Mortgage Broker for a Home Loan
If you want the best mortgage for you but don't know where to start, a mortgage broker can do the shopping for you.
- Difficulty:
- Moderately Easy
Instructions
Things You'll Need
- Real Estate Agents
- Real Estate Brokers
- Online Mortgage/finance Services
-
-
1
Contact state and local boards of Realtors for lists of mortgage brokers in your area. Ask your own real estate agent or friends for references.
-
2
Call recommended brokers and ask how many different lending institutions they work with.
-
3
Ask prospective brokers how they are compensated. Brokers work for either a flat fee or a percentage of the mortgage amount.
-
4
Ask what types of institutions, or individuals, the broker works with. This can be particularly helpful if you are having trouble getting a loan through conventional local lenders.
-
5
Ask about different loan programs that might be available. A good mortgage broker keeps a steady eye on the markets and can provide you with help getting a special deal, such as public money that is available for first-time buyers.
-
1
Tips & Warnings
Brokers do not make or approve loans. They only act as intermediaries, putting you in contact with a prospective lender. For this they receive either a flat fee from you, or you may have to pay an extra point (one percent) on the amount of mortgage you borrow. Determining how they are paid can save you money.
If the board of Realtors in your area does not have a list of brokers, contact the National Association of Mortgage Brokers for the location of your state's association. They will, in turn, be able to refer you to local brokers.
If you are a first-time buyer and are low on your down payment, look for a broker who will work for a percentage of the mortgage; this percentage will likely be about one percent of the loan, and can be included in your mortgage payment rather than paid as an out-of-pocket expense.
If you are torn about using a broker, ask yourself what type of person you really are. If you are the type that waits until the last minute to buy a gift because you dread shopping, chances are a mortgage broker will end up saving you money.
Brokers are of the greatest value to people who hate the drudgery of shopping, or who have marginal credit.
One way to protect yourself is to pay the broker's up-front fee (if any) with your charge card. If he fails to make good, you can dispute the charges and get your money back.
Some brokers have been known to push programs with high points or whopping interest rates - which means more money for them. This occurs most frequently with people who have problem credit.
Beware of anybody who tells you what you want to hear.
Related Searches
Comments
-
loaninsider
Aug 11, 2009
Choosing a broker to fund your loan can be difficult if you don't know what you are looking for. A few things that can help in weeding out the bad options are: Does the officer answer their phone when you call? How many banks are they approved to do loans with? What are your bottom line fees? Real Estate is local, why not your mortgage broker? Do they offer VA, FHA and convetional financing? Do they have a well trained processor? These are most important in finding a good broker in my opinion. -
luvxoni
Aug 19, 2008
Thanks for the flood of information the article and the comments were very helpful.
-
luvxoni
Aug 19, 2008
Thanks for the flood of information the article and the comments were very helpful.
-
hjtglobalenterprise @gmailcom
Jul 15, 2008
Most brokers get paid a percentage of the loan amount (IE: pretty standard 2%, which is included in your closing costs) and/or a yield spread, which means that the lender pays them. Some brokers will let you know up front that you have options. You can choose to pay more "points" up front and get a lower interest rate (BEST OPTION) or pay no points and get a higher interest rate (as the lender will give the broker multiple options on your rate and allow them to choose how much they get "paid on the backend of the loan"). With most brokers, you won't pay any out of pocket expenses (except your appraisal fee) and they will have access to "wholesale" rates, rather than "retail" (meaning the rates you would get going to any financial institution). Talk to your broker/loan officer and ask them what options you have. Also look for the YSP on your closing statement (HUD) as it will tell yo
-
EasyAsAllied
May 26, 2007
As for credit unions, IF (and this is a big IF), they hold the mortgage, they most likely would be able to give you a good value. But most credit unions are WAY to small to hold to many mortgages . Thus they use a broker to do most of their loans, if they do this they want the broker make the servicing of this loan seem like it is coming from them....to do this right costs a lot of money, thus the rates and terms they can be offered are HIGHER than going straight to a broker in most cases.
