Mortgage Loan Officer or Broker Helping first-time buyers select a mortgage lender, loan officer, or broker.

Mortgage Loan Officer or Broker
When you select a mortgage loan officer or broker you are making a huge decision.  After all, the type of loan, your interest rate, the fees and your approval for a loan may be at stake.   Before you make this decision you need to do a lot of research and ask a lot of questions.  Learning from neutral sources like FirstHomeAdvisor.com is a smart move.

For starters, it helps to know the difference between a mortgage lender and a mortgage broker. A mortgage lender directly makes you a loan, while a mortgage broker packages your loan for a mortgage lender to make.

One of the advantages of a mortgage broker is that they generally have more lenders to shop your loan to if you are having a hard time getting approval. The disadvantage  is that many brokers do not offer some of the best first-time homebuyer loan programs like your local State Bond Loan program. One is not better than the other because it depends on your specific situation and needs.

It is also important to know that even within a mortgage company or office there are individual loan officers and brokers who have their own specialties and levels of experience. Some of these loan officers are first-time homebuyer experts and some are not.  Others may be loan officers who don't offer the special programs for one reason or another. It is wise to work with a loan officer who has five or more years experience delivering first-time homebuyer programs like the State Bond Loan, Mortgage Credit Certficate programs and similar programs.

Finding a Good Loan Officer or Broker
Your State or local Housing Finance Agency is a good place to search for a loan officer. If the individual is a top performing loan officer with their state bond program, they are clearly a first-time homebuyer expert. Another good place to find a loan officer who specializes in offering first-time homebuyer loan programs is through your local non-profit homebuyer training and counseling provider. Many of the volunteers who help teach their classes are worthy of your consideration.

Interviewing Loan Officers or Brokers
There are thousands of loan officer to choose from and even ones with lots of experience who "work with first-time homebuyers all the time."  It is a good idea to speak with at least three or more different loan officers from different companies before you make your final selection. Here are some great questions to ask them to see if they are right for you:

How long have you been a lender/broker?
Do you offer the State Bond Loan?
Do you offer the Mortgage Credit Ceritificate program?
Do you offer any down payment assistance programs?
What other first-time homebuyer loan programs do you offer?
How many loans for first-time homebuyers did you close in the past year?
Does your company offer any special programs that others don't offer?
Why should I choose you as my loan officer?
Do you volunteer to teach homebuyer classes?  If so, where?
What programs do you like right now over others and why?
What upfront or nonrefundable fees do you charge?

In additon to these questions, you will likely come up with a bunch of your own. The more you know about the loan officer, the better choice you will make. If you are interested in a particular loan program like USDA, VA, State VA, FHA, FHA 203k, ask them if they offer it.  If you have a special need for a low down payment, alternative credit, or need a home loan program that is compatible with a lower credit score ask them about that too.

Selecting Your Loan Officer or Broker
Once you have interviewed three or more loan officers, it is time to make a final selection. At this stage it is a good idea to ask your finalists to provide you a cost estimate of the type of loans they would recommend for you. To be fair to each of them keep the loan amount and purchase price the same with each loan officer so you can make a fair comparison. Politely let each of them know you are only shopping around right now, but that you will be making a final selection very soon. It is best that you obtain all the cost estimates on the same day as interest rates can and do vary daily. The cost estimate should include a current interest rate, an Annual Percentage Rate (APR), the type of loan, up-front fees, other fees, closing costs, down payment and your total cash-to-close. I am not a fan of playing one loan officer off another. If their interest rates are the same and the difference between their costl estimates is a matter of a few hundred dollars they are basically in the same ball park. In a case like that you should feel confident that you are getting good and fair offers.  If one loan officer over the others has an offer that is much better than the others make sure you know why and what they can offer you that others can't.  Be careful if is sounds too good to be true!

Once you have made your final selection of a loan officer, it is time to take the next step and get pre-approved with them! Once you have gathered and submitted your required documentation and forms, you are only a few days away from being pre-approved.  Once you are issued a pre-approval letter, it is then time to select your real estate agent so you can start shopping for a home. Click here to learn about selecting a real estate agent.