Real Estate

Buying a House with the Help of a Real Estate Agent

Nothing is worse than being locked into a mortgage you can’t afford. The first step towards successful mortgage planning is choosing the right mortgage professional, so here’s how to choose a mortgage broker or mortgage advisor.

When trying to find mortgage brokers or advisors, start with friends and family recommendations. If you don’t know anyone who has recently purchased a home, ask your real estate agent for recommendations (this is why it’s important to get to know your real estate agent before you start shopping for a home). You can also get referrals from other professionals in the mortgage industry, such as title agents and property inspectors.

Do Your Homework

After obtaining a list of potential mortgage brokers, the next step is to do a little research on each one. Depending on how much you have to spend and where you plan on living after you buy your new home, this may be an easy task or it can be pretty complicated. In either case, here are some tools that will help:

The Certified Mortgage Planner Board of Standards, Inc. (CMPB)

The CMPB offers a free service that helps buyers and homeowners find a reputable mortgage professional in their area. The Web site allows you to search by zip code or state to find out which professionals in your area are CMPB certified and whether they have any disciplinary actions against them.

This organization provides a list of licensed mortgage brokers and advisors that are qualified to give advice on which type of home loan will benefit you the most. The CMP is the only national standard-setting body for practitioners in the residential finance industry.

Your local Better Business Bureau

The BBB website has lists of companies with their operating status, whether they have been in business for a reasonable amount of time, and any complaints filed against them.

Once you get the names of potential mortgage professionals, take a few hours to investigate each one carefully. Don’t just rely on Internet searches; call or visit their offices in person. Here’s what to look for:

  • Do they listen to your needs?
  • What are their goals for your home loan? Do these goals match yours?
  • Do they have experience working with someone in your situation, such as first-time homebuyers or clients with less than perfect credit ratings? Ask them about the number of clients they serve in your area and what percentage of them use government loans (such as FHA and VA loans).
  • How responsive are they? What is their response time when you have questions or emergencies arise?
  • Do they try to sell you on their services instead of providing information?
  • What kind of fees do they charge? Do they offer flat-fee services or do they use the commission system (a percentage of the loan)?
  • Do they have a track record of success?

Use caution and trust your instincts. It’s important to work with someone you can communicate with and who is trustworthy.

Finding the Right Professionals for You

Although there is no such thing as the “perfect” loan professional, here are some guidelines that will help you determine whether or not you have found a good one.

Knowledge and Experience

Does the professional have experience doing what you need them to do? For example, does your new advisor have experience with VA loans?

Are they a member of a professional organization such as the National Association of Mortgage Brokers (NAMB)? How long have they been in business?

Can they show you references from past clients?

How long have they been working with the kind of loans that are right for you (FHA, VA, conventional loans)?

Responsiveness and Professionalism

Does the professional return your calls promptly? Do they answer all your questions clearly and completely, honestly and accurately?

Do they communicate in a professional manner? Be wary of any person who tries to force you into making quick decisions with little information.

If you are married, will the professional work with both husband and wife or only one spouse? Remember that this is your loan, not just your partner’s. While many mortgage professionals will “assign” you to your new loan professional, it’s important that both of you feel comfortable with the person handling your loan.

Be on Guard for Red Flags

There are certain things to be wary of when interviewing prospective mortgage professionals. These red flags may indicate that the person is not the right choice for you:

Someone who offers to “lock-in” a low interest rate but will not provide you with any details about the lock-in agreement. The Federal Trade Commission advises that a legitimate lender will provide a written contract that lists what fees or costs can increase and when those increases can occur.

Someone who tries to pressure you into making a quick decision without giving you enough information to make an informed choice.

Someone who promises a loan that is not based on standard industry practices or who guarantees a loan approval that includes a low interest rate and fees.

An honest, reliable professional will respect your time and be responsive to you. The right loan professional can help you negotiate the sometimes difficult waters of home financing. But remember: if a deal sounds too good to be true, it probably is.

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