3 things to look for in a mortgage broker

3 things to look for in a mortgage broker

Couple dreaming new houseWhen buyers in Illinois go to purchase a new home, a mortgage broker matches them with a lender who then provides them with a loan. One of the main benefits of working with a broker is that they have access to a variety of different mortgage lenders and can introduce buyers to the best possible interest rates and loan terms.

However, it is essential that buyers look for three qualities in their broker to ensure that the partnership is beneficial.

1. Has an understanding of the borrower’s financial needs

When buyers go to purchase a new home, the mortgage that they acquire should complement their overall situation and financial goals. Due to this, buyers should look for a broker who pays attention to their individual needs and helps them determine:

  • What type of mortgage is best
  • How much they should put down on the loan
  • If they should pay points or receive rebates
  • If they should purchase mortgage insurance

Although there is no conclusive test that can help buyers determine if their broker will help them make smart financial decisions while buying a house, they should pay attention to whether or not the broker gets to know their situation before searching for loan options.

2. Provides specific information

A good broker can be a beneficial source of information for those buying a new home. However, when asking questions, the broker should not provide generalized answers. Instead, he or she should indicate that the best choice depends on the specific situation and explain which analytical tools or spreadsheets he or she will use to determine this. For example, when buyers ask their broker whether or not they should pay points on their mortgage, the broker should explain that this decision needs to be based on how long the buyers expect to have the loan.

3. Acts in the buyer’s best interests

When dealing with lenders and third parties, a mortgage broker should act in the best interests of his or her clients. This means that he or she will guarantee the lender fees presented in the Good Faith Estimate, seek the best possible price for third-party charges, like title insurance, and use special arrangements with lenders to provide discounts. To ensure their broker provides services that complement their needs, property buyers should ask if title charges are competitive and inquire whether third-party fees will be higher when it comes time to close.

During the real estate purchasing process, finding a good mortgage broker is essential. Buyers who are unsure of whether the broker they chose will act in their best interests may benefit from speaking with an attorney who can provide legal guidance.

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