Four Questions

There are four questions you should ask your mortgage broker. If he/she cannot answer these questions to your satisfaction, you should look elsewhere for your mortgage needs.

1. Can I get references?
You should be able to get references of customers that were satisfied with your broker's service. Two to three names and numbers shouldn't be difficult.

2. How long have you been in business?
There's nothing wrong with using a new broker. But many new brokers did not start until business was booming in the last couple of years. A broker that has been in business at least three years would have a better understanding of the market.

3. How are you compensated?
Brokers are compensated in several ways. The lender offers the broker a yield spread premium. This is paid by the lender to offer a slightly higher rate to the borrower. If a broker gives the borrower a lower rate, usually the borrower will pay the broker points or fees to compensate. An honest broker will disclose exactly how this fee will be paid. Always ask for a Good Faith Estimate.

4. How do you handle rate locks?
Some brokers will let a rate "float" hoping the market will come down thus giving them a higher payout. An honest broker will tell you he/she is locking your rate and will do it that day. Typically, rates can be locked anywhere from 15 days to 60 days.

If you have questions, please comment. We would love to hear from you!

First Posting

This blog is intended to answer your questions. Please feel free to leave a comment with your questions. Do you have questions about the difference between an ARM and a fixed rate? Do you want to know about Yield Spread Premium? What exactly is APR? These are the questions we would like to answer for you in an honest manner.
Please let us know if there is anything we can help you understand in this volatile market.