The Mortgage Broker Trade Off

September 23, 2009 · Posted in News For Homebuyers

These days, shopping for a loan involves more than your average rate comparison. The lowest interest rate doesn’t necessarily yield the best mortgage to fit your needs. For example – did you know that you can actually save money by taking a higher interest rate with a 15-year loan?

Today’s homebuyers and investors are exposed to countless rate quotes and market updates – many of which combine different trends from different sources. That’s why, when shopping for a home loan, the company with the lowest interest rate doesn’t guarantee the best overall experience and financial health for the life of your loan.

Which loan programs are on the table?
Does your mortgage company have a wide array of programs to offer? Banks usually only offer a single set of programs, but mortgage bankers are like personal shoppers — they can search a database of programs and find the best investor for your loan. That translates to more options and a better chance of finding the right loan to fit your needs.

Do you get a call back right away?
Does your mortgage company call you back in a timely fashion? Are you getting the right level of personal attention? Response time is an enormous initial indicator of overall customer satisfaction.

Will the company outsource your loan?
Is your mortgage company’s process simple? Do they have to outsource your loan to a different office or state? A mortgage banker who can process your loan in-house has more control, can answer more questions in a timely fashion, and provides more security for your sensitive information.

How soon do you need to close?
Can your mortgage company provide you with a closing timeline? A mortgage banker with more control over the process gives customers a more accurate estimate of how long it will take to close your loan.

Did you receive proper disclosures?
Once you go through the initial application process, your mortgage advisor will send you a Truth-In-Lending and a Good Faith Estimate, listing specific fees and the APR associated with your proposed loan.

Did your loan officer fully explain the mortgage fees and APR?
Know your options. Is your mortgage company up-front about fees associated with the loan? What about the APR of your proposed mortgage? Are they providing you with enough options? Make sure you’re working with a company committed to full transparency and an attention to smallest details.

Do you trust them?
The best way to find a trustworthy mortgage broker that you feel comfortable with is to consult friends, family, neighbors and co-workers. You can also use helpful sites such as AngiesList.com and Yelp.com to find or reinforce your decision.

Bottom Line
Use detailed financial disclosures, response time, advice from trusted sources, and your overall intuition to help solidify your choice of a mortgage consultant.

After all, mortgage interest rates change every day.

Long-term relationships stay the same.