So you’ve decided to take out a mortgage – what comes next, and where do you go from here? Your next step would likely be finding a reputable mortgage lender or mortgage broker to help you in your goal to buy a new home. And there should be plenty around your area – a quick drive downtown will show you that there are a dime a dozen financial institutions or independent brokers willing to help you out. Then again, not all lenders and brokers can be considered equal, and there are, in fact, some that would use unscrupulous means in dealing with their customers. You don’t want that to happen to you, which is why we’re here to tell you how to find yourself a reliable institution or person who can point you to the right direction.
How to Find A Trustworthy Mortgage Lender or Mortgage Broker?
Your first instinct may be to go for the obvious. That would mean asking the mortgage lender about their interest rates, fees, and/or points. We get it – those are important questions to ask. But they aren’t the be-all and end-all of shopping for a mortgage lender or broker. In fact, a lot of representatives answer these questions with a forked tongue, or tell half-truths to sucker prospective customers in. At the end of the day, it may be much more important to ask the mortgage broker or lender if they can be trusted. Trust and transparency are two invaluable things you should always look for when shopping around.
After making sure you asked all the right questions, you would then want to give friends, co-workers, or family members a call and ask them if they know the lender or broker you had spoken to, and how their experience was with them, if the answer is yes. If the answer is no, ask them if they know someone who they consider trustworthy.
You should also make sure that you are being referred to a lender or broker who speaks in a language the average Joe can understand – did they use big and pompous words to sound knowledgeable, or did they speak in language understandable to the common man?
Other important questions to ask your friends include whether the lender locked in the promised interest rate, or if there were any surprise fees or hidden catches. Again, we should remind you that there are many mortgage lenders or brokers who hide these fees or caveats with smoke and mirrors.
Once you’ve trimmed your shortlist down to a few lenders or brokers, that’s where the real fun begins. That’s where you can ask the more in-depth questions, which may include, but not be limited to the following:
– How soon can you give me a Good Faith Estimate and projected closing costs?
– What are your fees and why should I pay them?
– Do you have any alternative products, such as VA loans?
– How do you make money off the products that you sell?
– For our personal reference and to be sure we can trust you, can you furnish a copy of the last three HUD-1 closing statements for successfully completed deals?
Those are just a few questions to ask, and if they answer your questions satisfactorily, you can be sure you’re dealing with a good and reputable mortgage broker or lender.