When shopping for a home, there will soon come a time when you turn your attention to the mortgage process.
In other words, you’ll need to answer this question: which lender can provide you with the best loan product?
Rather than beat yourself up, rather than worry that you’ll never make the right decision, it’s best to use a mortgage broker.
In short, this person is staffed with the responsibility of shopping around on your behalf. In the end, you hope that your broker helps you find and apply for the best loan based on your preferences.
While this all sounds good, it’s important to realize that some brokers have more to offer than others. For this reason, you need to ask the following questions before getting involved with a broker:
1. Can you provide me with references?
The best thing you can do is ask the broker for contact information for three to five customers who closed their mortgage in the recent past.
From there, contact each person to discuss the process. They can tell you if the broker treated them fairly, if the closing costs were accurate, and much more.
2. How do you make money?
This may not sound like any of your business, but it’s actually a very important question.
What matters most is that you aren’t the person paying the broker. Instead, the lender you choose should be responsible for compensating this person.
If you’re going to pay for assistance, you might as well take the time to tackle the process on your own.
3. What’s your approach to rate locks?
Once you’re ready to lock a rate, you don’t want to waste a single minute doing so. You tell your broker to move forward, and you hope that this person reacts without delay.
Unfortunately, there are times when this doesn’t happen. Instead, dishonest brokers gamble with your rate lock, hoping that the rate dips just long enough for them to make more profit on the deal.
There’s one easy way to avoid this: ask your broker to provide a loan commitment letter from the lender. This will include the interest rate, when it was locked, and when it expires.
If you’re excited about working with a mortgage broker, ask these three questions before you sign on the dotted line. It’s important that you’re comfortable with the broker you choose.