Tips for Choosing a Mortgage Broker

Deciding what type of mortgage to choose can be one of the more confusing aspects of the home buying process. It's important not to choose a mortgage outside your financial means which means that you may need to buy a home for less than what you've been pre-approved for. There is almost an unlimited range of possibilities from rates, to the length of the mortgage, to open mortgages, to locked-in mortgages.

A mortgage broker can make the whole process of choosing and getting a mortgage easier while looking out for your best interests. This type of broker is an intermediary who brokers real estate loans for individuals and sometimes businesses. Their purpose is to find a lender to provide you with the type of mortgage you need. They can also help you figure out what type of mortgage you can afford and help with financial arrangements like getting bridge financing and dividing up profits from the sale of a home to debtors. In a lot of cases you do not need to pay for this service since the bank pays the broker's fees for bringing a new client to them. The fee is usually based on the loan amount and is often in the range of one to three percent of the mortgage amount.

In most developed markets, licensed mortgage brokers are regulated. This guarantees they'll comply with your area's finance and banking laws. Even though they're regulated, there are still a few things you can do to make sure you get the best broker for your needs.

Finding a Broker

As with a lot of services, referrals are sometimes the best way to find a good broker. You can get suggestions from neighbors, colleagues, friends or family. If you have a good real estate agent, he or she may also be able to put you into contact with a respected and skilled mortgage broker.

Local real estate publications will sometimes list mortgage brokers. Your local newspaper may also have a Homes section where brokers may choose to advertise their services. An Internet search can also provide the names of many brokers in your area.

You may want to do an initial interview before hiring the broker. It doesn't need to be anything extensive including if they charge upfront fees, do they require you use a specific lawyer as well as questions about how the broker will be able to help you get a mortgage. The initial interview can be done over the phone. Check for how quickly the individual responds to your enquiry if you need to leave a message.

Personal Background Check

Based on your initial interview, do a little background research on the broker with whom you feel most confident. Confirm the broker's experience and double check to see how long the individual has been working. He or she may be able to provide references. If you received the name from an agent you trust, you can have added security in knowing your agent will not send you to someone who doesn't know what they're doing.