By Contributing Writer
Ryan Fitzgerald of Raleigh Realty
Mortgage Brokers are often referred business by real estate agents and have long-standing relationships with them. Like most professionals within a service industry, they also specialize in a specific type of program like USDA or FHA programs which should arise from their experience in past transactions using that loan type. Either way, the goal for a mortgage broker should be to save you the most money based on your specific lending requirements.
One common question home buyers have is whether or not they should use a mortgage broker referred by their real estate agent. Good Question. Typically you’ve selected the real estate agent because you trust them to act in your best interest throughout your transaction; but can you trust them to be sure your mortgage broker is the one that you should be using to maximize your savings? More often than not, if you’ve selected a trustworthy and reputable REALTOR, they will also refer you a mortgage broker that is right for you. In the event that you still feel uneasy, here are some red flags to watch out for when using your realtors mortgage broker
#1 It’s important for you to know that your home purchase can fall apart over choosing a Mortgage Broker that doesn’t act in your best interest, or doesn’t have the experience to obtain the best loan program for you. If you feel pressured to use the mortgage broker your REALTOR has picked out for you, this is a red flag to ask more questions or do a little research of your own.
Example: A home buyer feels pressured to use a specific mortgage broker and therefore does not explore all possible options. The lender that mortgage broker works with is not able to close within 50 days. The seller decides against selling the home to that client and because the broker had not explored all loan options available, the client lost the opportunity to purchase that home. The upsetting part is the client was qualified to obtain a loan well within that time frame, but felt powerless to do so.
#2: You are not given legitimate reasons as to why your agent has referred the mortgage broker. Good reasons include past experience in successfully closing one or more transactions with that broker or the broker specializes in the type of loan your real estate agent thinks would work best for you.
#3: You aren’t able to verify that the mortgage broker is a licensed professional in the state your transaction is being performed. Many mortgage brokers are licensed in several states You can do this by going to http://www.nmlsconsumeraccess.org.
#4: You are not provided testimonials or references upon request and are not able to contact the mortgage broker directly. When a real estate agent has your best interests you will know it. They will truly care about you as an individual vs. their bank account by providing top notch customer service. Part of that service means making you feel comfortable throughout the transaction. Obtaining references and testimonials
#5: Granted a real estate agent is not supposed to know about obtaining a mortgage loan at the same level of a good mortgage professional, but they should certainly know enough to select a good one for you. If your realtor seems to be unsure about basic topics like getting pre-qualified to purchase a home, what information you will need to provide a lender, what general loan programs are available to home buyers, etc. then you are right to question whether they have asked the right questions themselves.
What questions can you ask the lender directly?
Ask your mortgage lender what the best loan options are for you – they should be able to provide several options with different monthly payments, rates, and down payment options. Other good questions include:
What types of mortgages do you offer?
What are the best mortgages for me?
Are you able to obtain the loan in enough time to close on my transaction?
How do your rates compare and how does the Annual Percentage Rate translate over time?
Remember waiting to select a REALTOR or Mortgage Broker until you have found the home of your dreams is too late!