How should I go about looking for a mortgage broker?
In today's increasingly complex mortgage market, some novice borrowers seek the aid of a mortgage broker to find the most favorable interest rate or best terms. But some unscrupulous practices have cropped up among a few brokers. To avoid being ripped off, follow these guidelines in dealing with a mortgage broker:
- Request referrals
Ask reliable sources among real estate professionals and other knowledgeable acquaintances to recommend a good broker. When seeking referrals, ask whether there is any financial incentive from the broker to the person making the referral.
- Look for a license
Most states have licensing requirements and a banking and regulatory agency that keeps track of brokers who violate state codes.
- Find out about fees
Ask the broker for a list of all fees and how variable costs are calculated before entering into an agreement. Unless you have credit problems, the broker's fees should not be over 2% of the loan amount. Get a schedule of the exact fees a few days before closing. Read all paperwork carefully and check the math.
- Run a comparison check
Before talking to the broker, call some national lenders doing business locally and local banks to find out what the current rates and points are so you will know if the broker's are the best you can get.