Mortgage brokers have an incentive to help home buyers obtain financing. They are compensated only if they see to it that the loan closes. Loan officers from the local retail banks are usually compensated by salary. Their livelihood does not depend directly on the closing of the mortgage. With what possibly the largest investment in life, many home buyers prefer to work with mortgage brokers who have a stake riding on a successful and smooth loan process.

Typically your local mortgage broker will be able to be more flexible with loan options compared to your local bank. If you have a low credit score, most banks will not be able to help you out. Many mortgage brokers specialize in helping people with less than perfect credit. Remember mortgage brokers have access to hundreds of lenders from around the country, and each of those lenders has hundreds of loan programs to help you meet you mortgage needs.

What to Look for in a Mortgage Broker - When working with a mortgage broker to get a new loan for your home, there are certain things you should look for.

Possibly the most important aspect of a good mortgage broker is one who listens to you. You need to know that the person is working in your best interest, and how can they do that if they dont know what your interests are?

Interviewing your mortgage broker will help you decide if this is the person you feel comfortable working with on your largest financial transaction. You should be confident that your mortgage broker will provide you with the service and attention you require to insure a smooth transaction.

A Mortgae broker should be accessible to you at reasonable times. They should always return your phone calls within a reasonable period of time.

Questions to Ask Your Mortgage Broker - If you are considering applying for a mortgage, it is important to ask questions and have your questions answered. You need to feel comfortable that the decision you are making is the right one. Here are some questions you might want to ask.

What loan program based on my situation will be right for me? Your mortgage broker should be able to help you decide on a mortgage. There are numerous loan programs to choose from such as Adjustable Rate Mortgages (ARM), Fixed Rate Mortgages, and Pay Option Arms. They will also be able to help you determine what the length of your loan term should be; 15 year, 30 year , 40 year, or even 50 year.

Is there a prepayment penalty?
A prepayment penalty means that if you pay off your loan within a certain amount of time (by selling or refinancing) you will have to pay a penalty. Usually this penalty is several thousand dollars. Prepayment penalties are not always bad. In fact, you can usually get a lower interest rate if you have a prepayment penalty. But if you think you will be selling or refinancing your home within the next few years, it may be in your best interest to avoid having a prepayment penalty. In any case, you should at least know if you have one.