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Making Your Broker Work For You
Your mortgage broker can help you choose the best home loan, assist in the application process, and obtain cheaper rates by having access to wholesale mortgage offerings. Here are some tips on making your broker work for you, thus helping to save time and money:
1. If you haven't already found a broker, try to choose one who has been recommended by other trustworthy individuals, has a substantial amount of experience, and charges fees for their work which are competitive with those of other brokers.
2. Tell the broker specifically what your mortgage needs and wants are; do you want to pay it off quickly, is making a low monthly payment the first priority, or is having predictable monthly payment amounts more important?
3. Keep in mind that brokers also receive compensation from the bank which issues the mortgage, so his or her work may not be entirely to your benefit. Learn about typical interest rates independently, so as to be aware of approximately what a reasonable rate should be.
4. Be sure to ask brokers any questions about different types of mortgages, forms involved in the loan application process, or other related issues there are concerns about. It is better to ask questions than having to live with a mortgage which has deficient aspects you were unaware of.
5. Become familiar with common mortgage-related words before making an appointment to work with a broker, and make a list of the characteristics which need to be known about a mortgage (length, any pre-payment penalty, any points, etc.) before it should be accepted.
6. If you came to the broker based on someone making a recommendation, mention his or her name. This lets the broker know that you will probably tell that person about your positive or negative experience with them, and re-emphasizes the importance of consumer recommendations to them.
7. Don't refer to a maximum amount you are willing to spend on monthly payments; the broker may feel that he or she doesn't need to work toward obtaining a loan which requires an amount any lower than that (especially when the lender commission is taken into consideration).
8. Obtain and review your free credit report before working with a broker; a booklet issued by the California Dept. of Real Estate recommends this, and indicates that it can be requested online or by telephone. Knowing about your credit record will provide a better idea of what sort of mortgages realistically can be obtained.
9. After receiving your credit report, request that any inaccurate data be removed from it, prior to meeting loan brokers. Although it involves some extra work, this will prevent the broker from finding a mortgage based upon incorrect credit information.
10. If this applies to you, don't admit to knowing very little about mortgages or real estate. Although making a statement such as this wouldn't necessarily be harmful, some brokers could try to take advantage of it.
11. Do not allow your broker to pressure you into making any decision, such as accepting one specific kind of loan without taking other types into consideration. Make sure any papers you sign do not contradict what the broker has told you.
12. Use other sources of information to confirm that the broker is offering you a good deal, before accepting it. Don't feel intimidated about rejecting a mortgage offer or asking more questions about it.
Remembering to follow these tips should help you ensure that the mortgage broker is making a serious effort to obtain a loan, which is to your benefit, and it will enable you to avoid any efforts by a broker to promote loans which are not in your best interest.
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