As a mortgage broker I follow a value proposition of providing my clients an unbiased resource to help them make the most educated mortgage decision. My business is built on developing relationships with real estate agents, lawyers, financial planners etc so they will send me their clients in order to get them the best possible mortgage deal for their situation. If I do not provide the best service possible I will not get referrals from these sources and will have a tough time staying in this business.

There are other ways to secure business from people and that is in the form of cash payments, points for use towards trips, merchandise etc or even a promotion where you send so many referrals for a chance to win something of significance. Basically stating you send me your clients and I will take care of you in a monetary way.

Now you may think this is not a big deal and just the cost of doing business. Well you are right to a point but have you sat back and thought “how does this effect me, the home buyer/seller?”

Let’s use this as an example. You have put an offer in on a house and your agent is pushing you to go to a certain person or lender for the financing. So you go to this lender/person and they get you an approval with a rate you feel is good. The house closes and you start to speak to a friend. This friend asked you who you used for the financing as they are dealing with someone and want to know if they are getting the best deal in the market. You tell your friend that you got a great 5 year fixed rate at 3.59% and the people you where dealing with where fantastic. Your friend tells you his mortgage broker has him approved at 3.29% for the same term. How would you feel? If it was me I would be upset with myself at not doing some research and asking the right questions.

I wrote a blog about certain questions you should be asking your broker. You can read this blog here. Now the blog pertains to mortgage brokers but what about your real estate agent. Should you not ask him why they are referring you to someone? Did you ask them if they get any rewards for sending you to this lender/person? If not why?

If the agent is sending you to someone because they are getting something in return then you need to ask if they have another person they can also recommend that is not offering some incentive so you can be sure you are getting the best deal/service in the market today. They should be able to refer another broker and if not start asking around. This is your money and too big of an investment. This way you will know for sure you are getting the best possible deal for your situation.

Now I am not saying you did not get a great deal for your particular situation but how do you know for sure without doing a little leg work. Ask your friends. Check the web. You need to be as educated as possible when purchasing a home. A good broker should spend the time explaining all the aspects of a mortgage. Each lender has different policies and procedures. For example what amount are you allowed to pre-pay? What will it cost you to pay out your mortgage early? These are all things you need to know.

You can check out a blog here regarding buying your first home or mortgage 101 here. Do the leg work. Check the broker and agent out on line. You can google their name. Check their websites to see if any testimonials from clients. If on social media check their on line status. Follow them on Twitter. Check them out at Linkedin. Bottom line is know who your are dealing with.

As stated the lenders are all offering great rates but this is only one aspect of a mortgage. Know all your options prior to signing anything and talk to a professional even before going out and looking for a home. Like anything in life you need to plan. Do you have a broker who has gone through the pre-qualifying process with you? If so you will have an amount you can work with. Are you working with a real estate agent and if so have you checked them out? If you go to a mortgage broker ask them to refer you to an agent but do not forget to ask them if there is any extra incentive by doing so. Once this is done go look for you home and let us take care of the rest.

As always comments are appreciated and encouraged.

Eric Gall is the owner of Avanti Mortgages (operating as a mortgage specialist for TMG Atlantic). If you are purchasing, refinancing or renewing your mortgage contact Eric or check out his website and apply online.