By Sabrina Karl
Simply dip your toe into mortgage shopping and you’ll immediately encounter more options than you can count. With so many lenders, rates, and loan types to consider, making a smart choice can quickly overwhelm.
That’s why some homebuyers and refinance candidates work with a mortgage broker, helping them narrow the field to best options, and then efficiently navigating the involved paperwork process that follows.
Just as with anyone you hire, choosing the right mortgage broker can mean the difference between a smooth, cost-effective process and a bumpy one with higher costs. Arguably the best place to start is with recommendations from people you know, as favorable word of mouth is one of the strongest indicators that a broker delivers good value to clients.
Interviewing prospective brokers is important, and you’ll want to ask several questions. An obvious one is how they charge for their service. The most typical arrangement is 1-2% of the loan amount. But other fee types exist so it’s important to clarify, as well as whether the fee will be folded into closing.
Another important question is what lenders the broker works with, and how broad that field is. The more options, the better the chance of your broker finding you a top rate and/or low fees.
To get a sense of the rates a broker can provide, you can ask them for a quote if you provide specifics on your credit score, desired loan amount, and planned down payment. If interviewing multiple brokers, ask for rate quotes on the same morning as mortgage rates change daily.
For those wanting to ease the sometimes daunting process of securing a new home loan, mortgage brokers can be a great partner in the process. Just be sure to do your homework on a positive fit and good value.