How can you decide if a mortgage broker is a good one or a bad one? The best way is to learn the answers to the following questions:
How Does the Broker Obtain New Business?
A good mortgage broker is very likely to be someone who obtains new business mainly through referrals. If you received your broker’s name from a friend, family member or your realtor, you may have a good broker. Brokers who obtain your name from a purchased list, most likely, will not work in your best interests because they do not necessarily have a steady stream of clients.
Can the Broker Answer Your Questions?
A good mortgage broker will learn what your goals are and will answer pertinent questions to ensure that the action you are about to take is the correct one. The mortgage broker, who does this, wishes to make sure that you can actually afford the loan. For example, before you move forward with a loan, you may wish to ask your broker these questions:
• What kind of mortgage is best for me?
• How much of a down payment should I offer?
• Would it benefit me to pay points?
A good mortgage broker will inform you that the answers to these and all questions will depend on what you would like to accomplish. If the broker has a specific calculator that can help you answer them, this is even better. A sign that you need to run is if the broker can immediately answer these personalized questions without probing further.
Is It Possible to Lock In Your Interest Rate?
In some cases, you can lock in a desirable interest rate. If you are working with a good mortgage broker, he or she will make sure to explain the entire process so that you understand exactly what this will mean for you. A good broker will inform you of the advantages and disadvantages of locking in a rate for a long or a short period of time.
If your mortgage broker never mentions the fact that there are longer and shorter locking periods, you may have a bad broker. If you decide to lock in your rate and do not receive confirmation from the lender right away, this may be because your mortgage broker did not ask to lock in the rate. This would mean that he is working in his own best interests rather than yours.
Most importantly, good mortgage brokers listen to you.