If you are currently looking for a mortgage and have decided to enlist the help of a mortgage broker, then you’ve made a smart move. The next step is ensuring that you find the best mortgage broker. How do you do this? Gather as much information as possible and ask important questions. Here are some key things you should know about the broker, as well as the ways in which you can find this information.
Judge by Experience
The mortgage brokerage industry does have a fairly high turnover rate, so it is important to know how long the broker has been in business. This helps to determine if the mortgage broker is a seasoned professional who has been through hard and good times, as opposed to a newbie who has just come in.
Ask About Mode of Compensation
Brokers are generally compensated in two ways: fees and yield spread premiums. Fees are a percentage of the loan amount, while yield spread premiums are direct compensation for signing the borrower up for a higher interest rate than what they would have otherwise opted for. While the latter may be a bit controversial, they are actually suitable for borrowers who cannot afford the upfront costs associated with the loan. If you can’t pay upfront, then you pay over time. Ask the broker about yield spread premiums before signing anything.
Ask About Rate Locks
Rate locks are a way for some brokers to speculate on the rise and fall of interest rates—often at the borrower’s expense. Ask the broker about rate locks and how they handle them. However, to prevent the broker from doing any kind of speculation, it is best to get something in writing.
Ask for References
Ask your broker for references. If he/she has satisfied clients, then it’s best to ask them directly, and they will give you honest answers.
Surf the Internet
Do some background checking on the mortgage brokers. See what their credentials are and whether they are licensed and listed. There should be an online directory for registered brokers.
Interview At Least Three Brokers
You should have a shortlist of at least three mortgage brokers before deciding on the best one. Compare them and see which one you feel most comfortable with.
Deciding on a mortgage broker can be a detailed process, but making the effort could save you thousands or tens of thousands of dollars in the long run. If you are in search of a mortgage broker, then contact us today. Our specialists can help you find the best mortgage for you, and we will be more than happy to answer all your questions.