If you’re ready to purchase a home, finding the best mortgage broker in your area is essential. A knowledgeable mortgage broker will have all of the experience and insight needed to help get you the right loan and prevent costly errors.
Before selecting a broker, take these tips into account to find the one best suited to your individual needs and preferences:
Verifying Mortgage Broker Credentials
Mortgage brokers must be licensed by their state’s regulatory agency or have passed the Nationwide Mortgage Liensing System & Registry exam. You can verify their credentials by checking with the Better Business Bureau. Furthermore, reviews about their service can be found on websites like Google, Yelp, Facebook and Trust Pilot.
Make Sure They Have an Affordability Calculator
Ask your mortgage broker if they offer an affordability calculator and make sure it’s up-to-date. This way, you can determine how much you qualify for based on both your income and debt obligations as well as the size of your down payment.
Utilize Your Real Estate Agent’s Referrals
A good real estate agent should have access to local mortgage brokers and be able to suggest qualified individuals who can meet your home buying needs. They have a vested interest in referring a reliable broker who will get your loan closed promptly, making the process simpler for both of you.
Reach Out to Friends and Family
If you know any real estate agents or other people who recently bought homes, ask them for recommendations on a mortgage broker they used. Doing this can save you a lot of time in the long run since it allows you to focus on narrowing down your search without needing to spend hours researching online.
Look for a broker with an impressive record of providing excellent customer service. Ideally, find someone who takes time to understand your requirements and expectations. They should answer all questions thoroughly, explain any details in an understandable manner, and give you an accurate timeline for the process.
Be wary of brokers offering “as low as” rates on their websites or advertisements, since these can be misleading. Lenders typically use these low prices to generate leads and the rate you ultimately end up with will depend on your credit and financial history.
Determine How They Earn Their Money
Mortgage brokers operate as independent contractors, so it’s not unusual for them to receive a fee based on the loan amount they assist you qualify for. On average, this fee amounts to 1.00% of the loan amount but may vary significantly. Be sure to inquire how this fee is determined and if you will be responsible or reimbursed by the lender.
Verify Their Compensation Schedules
Many mortgage brokers are paid for initiating loans with specific lenders. They may also receive a commission from the lender for each loan they sell to a buyer, making it difficult to understand their compensation schedules.