Step 1: Choose a good lender

Get referrals from friends who have recently gotten loans and find out how well they were treated. Ask them the following questions:

• Did the lender describe the available loans in easily understood language?
• Did he/she lock in the rate that was promised?
• Were there any hidden or unexpected fees that were not fully disclosed in the initial meeting? If they still have the documents, see if the fees on the loan documents were the same as originally disclosed on that initial Good Faith Estimate.
• Was the broker or banker responsive and able to deal with problems quickly?

Interview two or three of the most promising candidates and ask them the following:

• Can you give me the HUD-1 closing statement on the last three deals you completed?
• Can you give me the names and phone numbers of three recent clients?
• What are your loan programs? Do you offer VA loans (for example)?
• Can I see a Good Faith Estimate right away?
• Could you estimate closing costs for my loan?
• Can you estimate and explain your fees?
• How and when will you earn your income from this loan?
• Will you get approval for my loan locally?
• Are you certain you can get this done in time for closing?

If you are interviewing brokers ask these additional questions:

• How do you get paid, in points or commission?
• How much will you make on this loan from the lender?
• Name some of your top lenders.

Finally, when shopping for a broker, you may want to look for one that is a member of the Upfront Mortgage Brokers Association.

These are experienced brokers who promise to treat consumers fairly and to disclose compensation upfront. They won’t slip in extra fees when you are well into the process. You can search for a broker in your state at the website, www.upfrontmortgagebrokers.org.