How to choose a mortgage broker?

[Lifeblood]

I am looking to get pre-approved for a mortgage. I have spoken briefly with three individuals representing, in two cases, banks, and in the other, a private lender. I have an unusual recent employment history, having been unemployed for some time before recently becoming full-employed. My basic question is this: what specific questions should I be asking to help differentiate between these three folks, specifically to get the cheapest mortgage, including closing costs. Any advice?

[iamlindoro]

From your description, none of these sounds like a mortgage broker.  A mortgage broker is someone who processes your application, but "shops" it around to different lenders to get you the best rate.  The broker is paid a commission on the close of the loan.  If you want to see more than one option, you will either have to shop your own loan to multiple lenders, or contact an actual broker.  It might be worth speaking to your realtor, or a realtor you trust, to get referrals on a broker.

[johnhenry]

I would continue talking to your banks and private lender.  And I'd be sure to shop around with at least one local credit union. Most local banks and especially credit unions will treat you right if you have checking/savings with them.   

What details are they not telling you that you need to know??  Are they not willing to write you the pre-approval letter?  Usually that's just a formality to convince the seller you are a qualified to be loaned up to X amount, so they take your offer seriously.  Are you looking for this document?, or the details about the loan they are willing to provide?

Most lenders will at least ballpark the closing costs and tell you what rate they'll give you.  If you want more exact numbers they'll provide a good faith estimate after you provide all the details of the potential deal.

I don't think there are any specific questions to ask except the obvious ones:  "I'm looking for the best deal I can get on financing, what's the best you can offer.  I need to know the rate, terms, and estimate of closing costs."  And maybe a follow-up of "That's not good enough. What if I put a little more down or had my checking acct here, would that help?" 

[bruce88]

Ask your Realtor for recommendations.  Most do business with a number of lenders, and some of those are "specialists" (commercial, rentals, SFH).

[LiveLean]

I got nowhere with brokers last year when buying a second home/rental property -- brokers recommended by Realtor, who was otherwise spot-on with recommendations with contractors, inspectors, etc. Miserable experience with brokers. Pre-approvals are easy. Getting the ultimate loan much more difficult. I'm self-employed and we're always discriminated against in that process.

I should have just started with my bank and where I have my investment accounts. Much easier and got it done quickly with none of the conditions, fees, etc., that the brokers were going to charge.

[jnc]

Do a google search of questions to ask a mortgage broker.

Here are a few results:
http://www.bankrate.com/finance/mortgages/10-questions-for-lenders-1.aspx
http://www.bankrate.com/finance/mortgages/4-questions-to-ask-a-mortgage-broker-1.aspx

There are a lot more out there.

[malacca]

Costco has a website costcofinance.com

They have vetted the lenders (still lying, cheating crooks) so they are slightly better than average. A good place to compare rates. Don't expect Costco level of honesty or service.

FYI: Mortgage brokers are like used care salespeople. They pray on you not being able to compare and make a fortune on each transaction. They are in control of the rate - the higher the rate the more $$ in their pockets. Never have received a decent quote from a broker.

Also, small community bank or credit unions can be very competitive. They will require you to open a no fee account though before applying.