The Swami's Advice on Choosing a Mortgage Broker

The Swami knows that when you are ready to buy a home or refinance your mortgage the hardest decision might be the first one you have to make and that is which mortgage company or broker do I use?

If you look in the phone book or on the Internet you will see that there are literally thousands of choices --yes, the Swami said thousands. So how do you pick? Well, the first and most obvious way to find a loan company is by asking family and friends for a referral. No one is going to send you to a broker who they thought was unprofessional or unethical (at least not the Swami's friends).

A side note about referrals: Don't automatically go with the mortgage broker your realtor may refer you to. This not always the best choice. He or she may be referring you just because they have some sort of reciprocal working relationship and no other reason.

You can look in the phone book or on the Internet, but frankly there are so many choices that there is no way to to weed out who may be good or who may be bad. You can go with one of the big boys like Countrywide or eLoan etc but you may end up paying more. You can go with a multiple offer company such as Lending Tree or America's Lending Partner's.

A word of caution about multiple offer services: The Swami has heard (and seen) many stories of consumers using them for a mortgage only to have their credit report pulled multiple times by all the participating lenders. The result is that the credit scores dropped and serious damage done to the credit worthiness of the borrower -- So beware!

Here is what the Swami recommends: Get at least one referral. If you can get two or more, even better. Only have one company pull your credit report (and demand a copy) -- the more times your credit is pulled, the lower your credit score goes.

Next, call two or three other companies, tell them your scenarios, credit scores etc and ask them for a Good Faith Estimate (in writing).

Now compare apples to apples to see who has the best deal. Now take the best deal and call the other companies again and ask if they can beat it. Do this until no one can go any lower on rate, fees etc.

If all of the companies are in the same ball park, then go with the one who was recommended by friends. If you didn't get a good felling from him or her, go with the loan officer who you felt most comfortable with.

Now, here is a sample of today's WHOLESALE LENDING RATES. These are the rates that mortgage brokers get. If you don't know what they mean, email me.




RATE 15 DAY 30 DAY
5.250 97.883 97.808
5.375 98.606 98.531
5.500 99.299 99.224
5.625 99.801 99.726
5.750 100.125 100.050
5.875 100.767 100.692
6.000 101.212 101.137
6.125 101.585 101.510
6.250 101.834 101.759
6.375 102.363 102.288
6.500 102.718 102.643
6.625 102.896 102.821
6.750 102.991 102.916
6.875 103.315 103.240
7.000 103.518 103.443