How Do You Know Which Mortgage Bank or Broker To Use?

This is an easy question, an experienced and honest one.  The hard part is how do you determine who that is when everyone is a sales person.  You probably won’t know until it closes or down the road but hopefully with the new National Mortgage Licensing System (NMLS) that is going into effect will help. 

The NMLS requires all Mortgage Loan Originators (MLOs) to pass a state and national exam, do a criminal background check, and have a credit report pulled.  As long as everything checks out each MLO will get their own unique identifier number that you will be able to look up. 

Too many borrowers get caught up in the interest rate.  Although you don’t want to get a rate that is .5% above everyone else you do want to make sure that they are advising you and putting you in the right mortgage product, an 1/8th to a ¼ of a point in interest rate won’t change your life but a transaction gone bad will.  

What do I mean by that?  I mean that someone should be asking you about how long you plan on staying in the home, look at your credit card debt, see if you want to max out your retirement, etc.  If the answers are yes to looking to pay down credit card debt and maxing out your retirement you shouldn’t be going into a 15 year fixed most likely.  If you want to make bi-weekly payments you probably want to be told that it may not be a good idea to set it up with your lender and instead just add an extra amount of principle each month so that after 12 months you will have made 13 payments.  You don’t want to have a higher set payment and one month need extra money because of an unexpected expense.

I could go on for days on this topic but the most important thing to remember is that there is a lot more to a mortgage than just an interest rate.  There are a lot of great banks and lenders out there but they are only as good as they people they employ and who is handling your loan.