Finding the Perfect Mortgage Broker

These are extremely challenging times for consumers browsing for a mortgage, and it often helps to use the services of a broker. Before hiring one, it's important to shop for one who's reliable, resourceful, and reasonably priced.

One of the reasons that we're in this credit crunch and mortgage meltdown mess is because unethical and unregulated mortgage brokers preyed upon borrowers and got them into inappropriately risky loans. There are many excellent mortgage brokers, of course, and regrettably, their business has suffered because of the tainted reputations of those notorious bad apples. Don't hesitate to avail yourself of the services of a broker, but first, shop carefully to find the cream of the crop.

Know what you're shopping for

Here are five important tips for finding a great mortgage broker:

1. Solicit trustworthy recommendations. Ask your friends, family members, or favorite realtor to recommend their mortgage broker to you.
2. Best resources: The main reason to hire a broker is to shop for a loan from a wider variety of competing lenders. Unless your broker works with many banks and mortgage companies, you won't discover the best deals. Call around and ask brokers about their loan network. Make a short list of those who have the most resources to choose from when shopping for a loan.
3. Ask about compensation: No good broker works for free, but many bad brokers have been known to take kickbacks from lenders in exchange for steering customers their way. Ask how your prospective broker gets paid, and if the answers don't add up, look elsewhere.
4. Check credentials: Many mortgage brokers operate in an unregulated environment, and some have been known to set up shop in one place after being banned and barred from another jurisdiction. Find out your broker's background, professional affiliations, and certifications. Then, verify that his credentials are still current and in good standing.
5. Rely upon your intuition: Dealing with a broker to buy a home or refinance a mortgage can be one of the biggest financial projects of an entire lifetime. It's important to embark upon such a journey with someone who you can communicate with and rely upon. Listen to your instincts. If they wave a red flag, don't ignore it. Look for professionalism and experience, but also shop for someone with whom you enjoy a comfortable rapport.

Mortgage choices and decisions

Once you've located a broker who meets your standards, the next step is to narrow down choices of loans based on the numerous types of products that are available. Have the broker crunch the numbers and evaluate all options based upon your specific financial and personal goals and circumstances. Then, with his help, pick the one that's the most affordable and makes the most sense for both short and long-term financial planning.