The Mortgage Professor
The Habits of Good Brokers
This is the second of two articles on what makes a good mortgage broker.
A good broker will not quote lowball prices. Accurate pricing depends on a number of characteristics of the borrower, property and transaction. If they are not known or not used, a price cannot be accurate. Loan originators who quote the best prices possible, and sometimes even better than the best possible, to rope in customers are lowballing.
Avoid any broker who quotes a price without first asking you about loan size, down payment, loan purpose, type of property, use of property, state, credit score, and documentation of income and assets.
Don't tempt a broker to lowball by requesting a price on the telephone.
A good broker tries to find the best price available for your deal. That can be tedious work. Brokers get their prices from wholesalers in complicated price sheets, all of which are formatted differently, making comparisons difficult. Further, while pricing a loan, the broker must also be mindful of getting the loan approved.
There is no good way to monitor this, but you can ask the broker to show you rate sheets from the lenders he checked. That is not so that you can compare prices, which would require a lot of instruction, but simply to verify that the information is there.
Good brokers are masters of detail. Mortgages have many details that must be attended to before a loan can close. Overlooking even one can delay the closing, which could be costly to the borrower.
Good brokers avoid that by using a checklist. Ask to see the checklist, but don't expect to be able to keep it.
Good brokers keep their clients informed. Failure to do so is one of the most frequent criticisms of brokers I hear from borrowers, especially on transactions in which borrowers are faced with firm closing dates. Brokers often do not let borrowers know that matters are proceeding on schedule.
Negotiate an agreement with a broker on both the type and frequency of communication.
Good brokers attend closings when necessary. It may not always be feasible because of distance, and sometimes it isn't necessary because the borrower has been through the drill before. But if the borrower is a novice, having the broker available to help explain things is a major source of comfort.
If relevant to you, ask whether the broker will attend the closing.