For those of you who may not know, a mortgage broker is… a specialist who shops around for the best mortgage options for various types of home loans. If you don’t want to be bothered with the hassle of browsing online for the best mortgage rates and making phone calls to various lending companies to negotiate the best terms, then a mortgage broker is somebody that you want to meet.
Here are some tips to finding the best mortgage broker.
1. The mortgage broker should be licensed with the NMLS
This might seem like a no-brainer, but many people don’t bother to check to see if a mortgage broker that they are considering is even licensed with the National Mortgage Licensing Service (NMLS). The NMLS conducts criminal background checks on applicants, provides education and also performs testing to ensure that brokers conform to certain professional standards.
2. Ask friends and family members for a referral
You have a circle of friends and family members whom you trust, right? Ask them for the names of mortgage brokers with whom they have worked in the past. If they’ve had a good experience (or, better yet, several good experiences) with a particular broker, then you will likely have a good experience with that broker as well.
3. You may still need to do some shopping around
Although you won’t be shopping around as much as you would if you compared the mortgage options from various lenders, you might need to compare the pricing structure of various brokers. Brokers will charge you for their assistance with the loan. Usually, the charge is a percentage of the loan amount. When you’re talking to a broker, find out how much he or she charges for the loan. Brokers who charge fees that are exorbitantly high should be crossed off of your short list. You might also consider negotiating with the broker about the fee. Remember, the broker is also getting paid by the bank to service the loan.
4. Visit the National Association of Mortgage Brokers website
The National Association of Mortgage Brokers (NAMB) has a website that lists all of its members. These NAMB members must subscribe to a fairly strict code of ethics. If you’re considering a broker who is not a member of the NAMB, you should probably consider someone else.
If the broker is a member of the NAMB, you should also check to see if the broker has any advanced certifications. An advanced certification is designated by a phrase like “certified residential mortgage specialist”. It means that the broker has gone the extra mile to learn more about the mortgage industry.
5. Find a broker with experience
You want a broker with years, not months, of experience in the industry. Becoming a professional mortgage broker is a process that is complicated. It’s a science that cannot be learned overnight. You want someone with at least two years of experience, but five years or more is preferable.
6. Don’t respond to solicitations
All of the best mortgage brokers generate their customer base by referrals. Anyone who has to send out mailers to get customers is someone who is lacking in customers. That person is probably lacking in customers for a very good reason.
7. You’ll probably want a broker who services FHA loans
Not all brokers service FHA loans, and your investment objective may not require (or may not qualify for) an FHA loan. However, you may find that you will only be able to purchase a home with an FHA loan. Also, without an FHA loan, you will probably pay a higher mortgage rate. A mortgage broker who handles FHA loans is a winning candidate.
8. Online resources
There are numerous ways to evaluate brokers online. One way is to check the broker’s Yelp review. Another way is to check the broker’s connections and recommendations on LinkedIn or transaction history on Inzopa.