The National Association of Mortgage Brokers (NAMB) says that when buying a home, two out of three Americans use a mortgage broker because of the broker's expertise and wide range of loan products and lenders. But there are so many "experts" out there, how can you tell the good ones from the bad ones? How can you tell if a broker is telling the truth? And how do you know if they are really a "expert"?
The NAMB says that more than 70% of brokers are legal, which means that they have safeguards and rules in place to make sure they stay on the right path. So what about the remaining 30%? Well, 30 percent isn't too bad, but just like in any classroom, there will be those at the top, those in the middle, those at the bottom, and those who just don't show up. Those at the bottom and those who don't show up wouldn't be your first choice if you were going to surgery and they were holding the scapel. They also shouldn't be in charge of your loan when you buy or refinance a home.
Because the number of mortgage brokers has grown so much in the past few years, there are a lot of bad brokers out there. So that you don't end up in the 30th percentile, here are some tips to help you find a mortgage broker who is not only an expert but also trustworthy and honest:
Don't always believe what you hear. Most people start by asking friends or family to recommend a mortgage professional. But how do they know if the broker has a good name and can be trusted? Once you have some recommendations, check with the licencing and regulation offices in your state. I'd rather be safe than sorry.
Use a mortgage broker who is certified by the NAMB. Brokers who are certified by the NAMB follow the highest standards of ethics and professionalism in the business. The NAMB's website, www.namb.org, has a link called "Find a Broker."
Use a mortgage broker who is honest (UMB). If a customer asks, these brokers will let them know about their fees in writing ahead of time. They also say what the wholesale prices are that lenders give them. Go to www.mtgprofessor.com for a list of UMBs.
Being honest is the best thing to do. If a mortgage broker tells you to lie in any way on your loan application, he or she is probably in the 30th percentile. Walk away.
They should show you where the money is. If a mortgage broker doesn't tell you how much your closing costs will be in three business days, you might want to look elsewhere.
They shouldn't be putting pressure on you if you're not bleeding. A mortgage broker who tries to force you to do something you don't want to do has probably broken the rules of ethics. No honest broker will force you to do something you don't feel good about.
There's no such thing as a dumb question. Does the mortgage broker give you satisfactory answers to all of your questions? Are his or her answers clear, truthful, and polite?
Have you booked a room? You've probably found a good mortgage broker if you feel comfortable with the person you're working with and if they've answered all your questions and put your worries to rest.