Recently, a client asked me about how to choose a mortgage broker.

She wanted to know if it was necessary or smart to get preapproved by more than one lender since she was still figuring out who would have the best interest rates and programs for her. She wasn’t ready to choose a mortgage broker yet so she was unsure of how to get more information and proceed on preapproval.

Here’s what I told her.

My recommendation is to work with one mortgage broker. You will get the best service and the best rates from someone who knows that you are committed to working with them.

They can feel confident knowing that you are taking their time and their help seriously. This will make them more attentive and more apt to give you the best options available. Experience shows that the best professionals, be them Realtors, mortgage brokers, CPAs, attorneys etc, get most of their clients through referral so it behooves them to provide excellent, valuable service.

No mortgage broker can forecast precisely what rate you are going to get ahead of time. They can give you estimates based on today’s rates but until you have a property and lock in a rate, it will change. Imagine a stock broker telling you that you will be able to buy Google stock in a month, 6 months, a year for $x amount. Interest rates like stock prices fluxuate daily and it is impossible to 100% predict the future.

So what should you do if you are not ready to buy but want to have a sense of what you can afford so you can casually look at property? Get prequalified.

I recommend my clients interview a few mortgage brokers (preferably referrals from me or other trusted advisors in their lives) on the phone and then set up an in-office meeting with the 1 or 2 person they feel will best represent them. Based on your consultation with them, choose a mortgage broker with whom to help. Have this person do your full preapproval when you are about 3-6 months away from your desired moving date.

Do not have your credit score run by multiple mortgage brokers or lenders as it can lower your score. You can look up your own score with no harm done by going to www.myfico.com and pulling a report yourself.

Use this score to get prequalified rather than preapproved. You’ll have a good sense of what you can afford so you can look around. When you get serious about home buying, you can do the full preapproval.  

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