Shop Around - Talk to several mortgage brokers, and compare their fees and experience. Ask them for references.
Understand your mortgage broker's fees - And get them in writing! A mortgage broker typically obtains a "wholesale" price from a lender, and is free to set any "retail price" at which the loan will be offered to the borrower. The broker's fee will be the difference between the wholesale and retail price of the mortgage. Unless otherwise agreed, a mortgage broker will typically "mark up" or increase the cost of a loan, perhaps by adding points to the loan, in order to get the highest possible fee. Mortgage brokers are more apt to be able to charge excessive fees when they are working with borrowers who aren't consulting competing brokers, and who haven't otherwised tried to determine the cost of obtaining a similar loan without the assistance of a broker.
Read your agreement - Make sure that the promises your mortgage broker makes to you are the same as what is written in your contract with the broker. If you are seeking a home mortgage, don't let the mortgage broker mischaracterize the loan as "for business purposes" - any mortgage broker who does that is probably trying to avoid the application of consumer protection laws, or to secure a higher fee.
Be honest in your loan applications - Don't let a mortgage broker misrepresent your financial circumstances or any other information to lenders.
Verify your "bargain" with other lenders - Go back to your bank or another lender with your mortgage broker's best offer, and see if they will meet or beat that deal.
Borrow what you need - Recall that in a typical arrangement, the more you borrow the greater the mortgage broker's commission. Don't let the mortgage broker pressure you into borrowing more than you actually need.
It's not the promise that counts - If your mortgage broker promises you a great deal or exceptionally low interest rate to entice you to sign on, but can't deliver on those promises, consider switching to a different broker before making any further commitment.
Monitor interest rates - If interest rates decline between the time you lock in your rate and your closing, ask for a lower rate. To best protect yourself, you should have your broker commit in advance that, if lower, you will pay the lock rate which would be offered to a new customer on the date of the closing.
Get written confirmation of a lock - If your mortgage broker charges you a fee to lock in a particular interest rate, have the broker provide you with a copy of a written commitment from the lender. Some mortgage brokers have been known to pocket the lock fees.
Read the loan agreement - Make sure that the loan you receive is the same as what the broker promised.
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