Do You Need A Financial Guru?

Mortgage Broker

What’s that again? Shopping for a home loan can be one of the most daunting financial chores you’ll face. These intermediaries act as a liaison between borrower and lender and can simplify the process by researching various loan options, counseling consumers on their choices, and facilitating the transaction, says Jim Pair, a certified mortgage consultant (CMC) and a former president of the National Association of Mortgage Brokers (NAMB), an industry organization. These pros got a bad rap during the subprime-mortgage crisis, but they can be invaluable in securing a good deal.

When to hire: Anyone in the market for a home should consider going with a broker, but that is particularly true if your credit score is below 680 (or you have other credit problems), if you are self-employed, or if you need a jumbo mortgage (more than $417,000 in most locations). “In such cases, a broker could find you a better interest rate than what you could get yourself,” says Liz Weston, an MSN.com columnist and the author of Your Credit Score, Your Money & What’s at Stake (FT Press, $19, amazon.com). But even if you do hire one, do a little digging yourself to verify that you’re getting the most favorable rates and terms. (Go to schwabbank.com for current information.)

Expect to pay: One to 1.5 percent of your loan amount; often the lender covers this fee.

How to find a good one: Go to namb.org; look for a broker who has a lending integrity seal from the organization. This mean she subscribes to a code of ethics, has had a criminal background check, and meets certain educational requirements.