As we have mentioned before, whether the decision to use a mortgage broker to find you the best home loan is a sound one or not will depend upon how good a mortgage broker you can find. In order to find the right mortgage broker you need to be able to interview him effectively and make the best choice. Making the best choice on the mortgage broker or the real estate agent will probably lead to finding the best home loan. Following are some of the questions that you should ask the mortgage broker and yourself before deciding.
How many lenders does the mortgage broker deal with and how current does he stay on their programs?
In order for a mortgage broker to give you the best possible deal, he should know many lenders in your local area and also be updated with the various programs they offer. Only when he knows many different options, will he be able to direct you to a lender who has the program tailor-made for your needs and requirements.
How knowledgeable is a broker and how patient is he in explaining the different loan programs to you?
The more lenders mortgage broker knows, the less likely he is to know about their programs in great detail. However, avoid a mortgage broker that seems to be only offering and pushing you towards a certain kind of loan. For example, if a mortgage broker insists that you take an adjustable rate mortgage in spite of what your feelings about that home loan are, he should duck for cover and find another mortgage broker. Furthermore, if the mortgage broker tries to push you towards balloon loans and negative amortization loans, you should avoid that broker at all costs. We have mentioned balloon loans and negative organization loans in a sections before and they are hazardous mortgage loans to take because they can put you in serious financial trouble in the future. Balloon loans will become fully due after a few years of taking them and require you to pay the entire amount you on your mortgage. Most of the borrowers find this an immense burden and more than a few have to take recourse to foreclosure. Negative amortization occurs when your outstanding loan balance increases every month even though you keep making regular monthly mortgage payments. This was one of the toxic mortgage plans that led to the downfall of the mortgage lending industry once the real estate prices collapsed in the late 2000s.