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.

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.

[lightray15]

on 4/17/2009 Powerhouse Solutions does FHA loans with 3.5% downpayment and requires a minimum 620 credit score. We have a 100% success rate. We are now offering a tax credit for $8,000.Call Sandy at 845-639-0407 845-596-2846

[mikesmith3]

on 3/16/2009 After much research I've found the following websites cover everything about the "Making-Home-Affordable" plan and mortgage information in general. If your loan is held by Freddie or Fannie, you might qualify for a refi or loan mod. First, find out if your loan is held by Fannie or Freddie. Contact them here to find out. They give you the phone number to call Fannie and Freddie directly to see if your loan is held by one:http://www.financialstability.gov. For an idea whether you even qualify, even if your loan is held by Fannie or Freddie, you can calculate your eligibility here:http://www.making-home-affordable.com I�d also call HUD. I don�t have their number but you go to: http://www.hud.gov And last but not least is MortgageBreakDown, in my opinion one of the best new mortgage sites for independant information available. Easy to read, navigate and contains solid information:http://ww

[luvxoni]

on 8/19/2008 Thanks for the flood of information the article and the comments were very helpful.

[heatherjt1]

on 7/15/2008 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]

on 5/26/2007 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.