Ya Know a Good Mortgage Broker?

It's a fact that all mortgages do not suit all people. It's also a fact that all mortgage brokers are not the same. As the recent spike in foreclosures and crushing no doc loans have shown us, some brokers are clearly more interested in personal gain than in meeting borrowers' needs. But if you're looking for a home in the competitive financial market we have now, a mortgage broker may be exactly what you need to get the best deal There are a myriad of loan types out there and as many different financial situations as there are individuals. A broker can help make sense of your options and help you sort through financial products in order to choose the mortgage that fits. So what should you look for in a good broker?

Like any partner in a major business transaction, you should look for someone you can establish a good working relationship with. Try to get referrals from people you trust, word of mouth is often the most reliable advertising there is. Meet with them and see if you have good communication with them. Ask upfront if they make client needs a prority. Is this someone you trust? Keep looking until you find a solid connection.

You'll also want to know what the broker will do for you. Essentially, a good mortgage broker is part expert shopper, part translator and part advocate. Here's how:

Expert Shopper: Two mortgages with the same rate are not necessarily the same. A good mortgage broker will research the sea of financial products on the market trying to locate a solution that works for you. They take the time to weigh current rates and terms against your budget and financial situation. Not limited by the rules of one particular financial institution, their job is to find you the best deal - whether it comes from a bank down the street or from across the country.

Translator: The world of real estate financing presents a whole new world of language that most people have to learn from scratch. A good broker is an industry expert who not only understands these terms but will also take the time to explain them to you, answer your questions and detail how different aspects of a loan relate to your particular financial situation.

Advocate: Working with an expert has other advantages. In addition to finding a financing solution that you like, your broker will negotiate the deal, provide you with industry information and take care of the paperwork. They will assess your financial situation, gather necessary documents, apply for pre-approval, make the application and submit everything on your behalf.

Though mortgage brokers don't work for free, they don't necessarily cost you anything either and a good one will save you money. Many brokers are paid a finder's fee by lenders for bringing your business to them. If you aren't sure how your broker gets paid though - just ask. The Real Estate Procedures Act gives you the right to know. You also have the right to know the amount of the Yield Spread Premium, if there is one.