If you want to find an ethical and reliable mortgage broker and you don't know where to start please read my "10 Steps To Find a Reliable Mortgage Broker and be a Winner. You'll never get ripped off.

A mortgage broker should be shopping the loan and find you the best rate and best loan program.

10 Steps To Find an Ethical Mortgage Broker:

1. Find a mortgage broker in your area. I would not recommend you ask a real estate agent because when an agent refers a potential client to a mortgage broker, the broker knows that he is most likely to get the business. Often time the broker will take advantage of the situation and will get a "yield spread premium" from the lender by giving you a higher interest rate. The mortgage broker will make a lot of money and you will end up paying TENS OF THOUSANDS OF DOLLARS in additional interests over the life of the loan.

2. Call recommended brokers and ask how many different lending institutions they work with. Lenders offer wholesale prices to brokers because brokers perform costly services that lenders would otherwise be forced to provide themselves. 

3. Ask prospective brokers how they are compensated. Ask them: "How many points do you charge?"

4. Ask what types of institutions, or individuals, the broker works with. This can be particularly helpful if you are having trouble getting a loan through conventional local lenders.

5. Ask about different loan programs that might be available. Fixed or adjustable rates? What is the loan term? Why do you suggest such loan program? What are the advantages of the loan program you suggest?

6. If he is pushy or you feel you are uncomfortable with a mortgage broker then let him go. If you feel that the mortgage broker try to sell you something then he may not be the right broker for you. Beware of mortgage brokers who try to sell you the option ARM. It is an adjustable rate mortgage that can potentially have a negative amortization. Every mail piece you receive usually advertise the option ARM. Beware of the lowest payment option of this loan program that can result in negative amortization.

7. Avoid giving your social security number to all agents who ask for it. Once you gave it to one person, then ask him to email you the report so you can see it and find out about your mid score. Then you can share it with other mortgage brokers. Too many inquiries on your credit report can lower your score. The lower your score, the higher the rate you'll qualify for.

8. If a broker refuses to email you the credit report or the appraisal you paid for, then you should be concerned and refuse to do business with him. Brokers should feel comfortable giving you these 2 things. You should be able to contact other brokers and give them the necessary information so you may receive other quotes.

9. Try to find out about his true intentions. Is he a good adviser, knowledgeable about his industry or is just he a sales person trying to make a commission? He is pushy? Does he care about you or his commission? The most important is finding, a broker who cares about people, who advise and help borrowers. A reliable broker will be passionate about real estate, and goes beyond his duty. He will go the extra mile.

10. Review all 24Questions You Must Ask Your Broker.

Other Tips To Find a Reliable Mortgage Broker:

Mortgage Brokers do not approve loans and they are not the decision makers on your home loan. They only act as intermediaries, putting you in contact with a lender. Their primary job should be to shop around and find you the best rate quote available to you. For this the mortgage broker receive an origination fee or point(s) that they charge upfront or that will be paid as a "yield spread premium" by the lender. Determining how they are paid can save you money.

Brokers are of the greatest value to people who hate shopping for a loan, or who do not have the best credit.

Warnings:

Some mortgage brokers have been known to push certain loan programs with high points or whopping interest rates, which means bigger commission for them. This occurs most frequently with people who have problem credit.

Beware of any mortgage broker, loan officer, lender or banker who tells you what you want to hear.