How to find the right mortgage broker

How to find the best mortgage broker for all home loan needs

By Mark Barnes

Direct Lending Solutions Staff Writer

Anyone in the market for a new home or investment property should seek professional help from the best mortgage broker available. People looking for any kind of home loan need a quality mortgage professional. Some people get a new home loan every two to five years and, remarkably, use a different bank or mortgage broker each time. Not only is this surprising, it's a very dangerous financial approach to home loan finance. With an ever-changing market, different interest rates virtually every month, and a myriad of mortgage programs available, anyone considering a real estate transaction should obtain a mortgage professional and use this person for every home loan.

In the new Millennium, the average borrower has less-than-perfect credit and very little money for a down payment. Many mortgage brokers, in fact, now offer home loan programs with no down payment. Fortunately, this is rarely the problem it used to be. Today just about anyone can get a mortgage, if the right mortgage broker is pulling the strings. Before examining loan programs and interest rates, it's important to understand how to acquire the right mortgage broker.

When looking for your new mortgage broker, ask the following questions, and you will get the person you need.

What is your standard origination fee or broker fee? The answer should be one to two percent of the loan amount. Mortgage brokers who try the old two-step with this question and stutter their way through should be quickly dismissed. This is an easy question to answer, and good mortgage brokers should not be afraid of it. If they are willing to work extremely hard for you, the fee will wind up saving you thousands of dollars down the road, so you should not be afraid to pay it..

How long has your company been in business? Unless you are really impressed with a particular mortgage broker, stay away from companies that have not been around for at least three years. The business has become very popular in recent years and many hotshot mortgage brokers figure they can jump in while rates are low, make a quick buck, and get out. Over three trillion dollars in mortgages are completed each year, so more mortgage brokers are trying to grab some of this wealth, and many of them are not very good at what they do.

Will the fees change if I get a “Par” rate? The term “Par” is the lender’s lowest offered rate, without you paying extra to get a better one. The answer to your question should always be, No. Few people understand what par is, and you don't have to get it to ask the question. Many unscrupulous mortgage brokers tell customers they are getting the best rate, when in fact, the rate is a full percent or two higher than what the lender is willing to offer. When a mortgage broker "sells" a borrower a rate above the par rate, the lender pays the mortgage broker a commission, because the lender makes more money. So, the broker and lender both win, but the borrower -- you-- loses. Only hire a mortgage broker who says he’ll get you par, if your credit is good enough, and if you qualify, you'll get the rate and the fees will not change. This is the sure sign of an honest mortgage broker.

What is the interest rate? What is the APR? Now, this is a question that you’ll ask after you’ve decided on the program you want, but it is very important. Let’s assume you get a 30-year fixed rate, and he quotes you 6%; your APR or Annual Percentage Rate, should not be more than 6.375%. Otherwise, there are hidden costs. The mortgage broker may quote you an interest rate but say he’ll have to get back to you on the APR. This is fine. Just make sure the APR is not significantly higher than the interest rate, or you are paying too much for you loan.

Will you come to my home to complete documents, and will we close the loan at my home? Before mortgage brokers started originating loans through the Internet and nationwide, they usually went to the customer's house. This is no longer necessary. All of the required paperwork for your home loan can be done via mail and fax. Any reputable mortgage broker, even from another state, should have a title agency that can close the loan any place you wish. Mortgage brokers are service people, and service is what you’re paying for. Bankers make you come to them.

Why should I use you over another mortgage broker? Most mortgage companies have the same programs and rates. What all don’t have are solid, honest, hard-working loan officers. The business is extremely competitive, and it takes long hours of hard work to make money in it. If you’ve found a good mortgage broker, he should be willing to stay on the phone with you, answer every question, and be honest enough to say he has to check on something and get back to you with accurate details. He should get back to you within an hour. Some even give you their personal cell phone numbers. This means you are special, and you should feel special. In fact, you should feel like you are the only customer he has.

Related Pages in Our Site: Apply for a New Home | Refinancing or Home Equity | Finding the right loan program