Finding A Reputable Mortgage Broker

So, you're searching for a mortgage broker, but you aren't really sure where to start. Well, there are several different places that you can look to find a mortgage broker – the phone book, online, and through friends and family are all great places to look. But, how do you really know that they are a reputable mortgage broker or not? Here are some tips to help you weed out the good from the bad:

1. Compile a list. Gather up all the information on mortgage brokers that you have gotten so far, from friends and family, the phone book, or online, and place it all on a list. Make sure that you have the full name of the company, their phone number, and either their address or web address.

2. Do some homework. Now that you have your list, you need to go through each mortgage broker and search out all the information on them that you can find through the Better Business Bureau and the Attorney General's office. You can do this either online or by phone. While you are looking through their information, here are some things that you need to look for: Has the company ever been involved in legal problems with the state or federal government? Are they a licensed mortgage broker in the United States, or are they overseas? How many complaints have been filed against the mortgage broker? If the company has several complaints or lawsuits filed against them either by the government or individuals, this should be a red flag and you should consider crossing them off your list. If the company is not a licensed mortgage broker, this is a huge red flag and you should drop them off your list immediately. If you come across any other issues that just don't set right with you, take that company off your list as well. You should feel completely safe with the company having your personal information and your money.

3. After you have narrowed your list down by doing a little background on each mortgage broker, you should have a few who are at the top of your list. Call these few and interview each one by asking some of these questions: How long have they been in business? What are their fees on mortgages and refinancing? What types of rates do they offer? And any other questions that you might need to know that pertain to your situation.

By finding out all the information that you can about the company before you sign with them, will help to ensure that you are choosing a reputable mortgage broker to handle your next mortgage.

Connie Barker is the owner of several financial websites including those that deal with Mortgage Brokers.

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Information About ARM Mortgages

ARM is the abbreviation for an adjustable rate mortgage. This type of home mortgage starts at a rate that may be lower than a fixed rate loan. After a certain time, that could be 6 months to 10 years, the loan is reset. The adjusted rate is an index, such as the Monthly Treasury Average (MTA), plus an additional amount called a margin. The rate will re-adjust according to your mortgage terms.

People select this type of a loan for various reasons. The spread between a fixed and variable rate changes over time. When a fixed rate loan would cost far more than a variable rate loan, customers are more likely to want the variable rate program. For example if a variable rate was 5% compared to 6.75% for a fixed rate. Right now the spread is small, making the fixed rate more attractive. If you think you are going to move or refinance in a few years the variable rate could have an advantage. For example if you are going to move or refi in 5 years you could get a 5/30 ARM. The first number (5) would be how long the starting lower rate is guaranteed for. Another reason to get an ARM is that you may qualify for a larger loan on the ARM because of the lower start rate. In some cases it is the only way to get a large enough loan for the home that the customer wants. During times when rates are very high a customer might want an ARM if they think rates will drop. Falling rates would result in the ARM adjusting downward. Another case where customers get an ARM is for some sub-prime loans. Some lenders that make loans for consumers with low credit scores only offer ARM loans.

As a mortgage broker I currently suggest a fixed rate loan for most customers. This is because there is only a small rate advantage for the ARM at this time. In addition with an ARM loan there is uncertainty about the future payment. Some consumers that got an ARM a few years ago are now facing payment shock as their payment rises. In some cases this can even be a factor that contributes to the customer losing their home. If you do go with an ARM make sure you understand how much your payments will be if the rate increases as much as possible. Many ARM mortgages also have a penalty if you payoff or refinance the loan in the first few years. This is another item to be sure you understand before committing to an ARM loan. Texas residents can call me at Texas Capital Mortgage for additional information at 281-537-7800.

This article is by Glenn Lamb, a mortgage broker and owner of Texas Capital Mortgage - http://texas-capital-mortgage.com and the Lamb Insurance Agency, Auto, Home, Life, and Business Insurance for Texas - http://www.farmersagent.com/glamb - Texas Health Insurance - http://health-insurance-for-texas.com

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