It pays to take your time finding a ’doctor of loans’

Comparison-shopping is great for any big purchases, and a mortgage loan is no different. Then why do some people feel funny about dealing with multiple brokers at once?

Broker Nancy K. Gardner, CEO of California Mortgage Consultants in La Jolla, Calif., says it’s because applying for a mortgage is such a personal matter in many ways. She likens a broker to a “doctor of loans.”

“This person has to look for information on all the symptoms and then massages them so that it all works to your benefit,” she says. An advantage of brokers, compared to loan officers from a financial institution, is that they can help borrowers tap into a wide range of mortgage products.

But engaging in long-range relationship with multiple brokers can be exhausting, particularly if you’re receiving conflicting information.

Brokers, after all, make a living based on the numbers of loans that they sell. They want to win your business. Industry experts argue those borrowers are wise to educate themselves about the entire mortgage process, particularly the factors that determine interest rates and monthly payments. That way, should they seek a second opinion from another broker; they’re looking at comparable numbers.

“Otherwise you don’t know what you’re doing. You’re not comparing oranges to oranges,” says Michael Femiano, mortgagee loan consultant with O’Grady Mortgage in Tempe, Ariz.

He says consumers often believe that the lowest monthly payment is the best option. A typical scenario: Borrowers on a 15-year loan term save a lot of money in interest payments compared to a 30-year term. But you wouldn’t realize that just by looking at the higher monthly payments.

So, if you want a second broker’s opinion, figure out what you need. Then keep up with the market trends. “Interest rates are a moving target that can change from day to day and change in midday. You need to be aware of even the interest changes when you’re comparing products,” Femiano says.

Trust your instincts if you think you’re being misled. If you’re promised a low rate, be skeptical if it switches at the last minute. Before signing any documents — or allowing multiple brokers to even pull up your credit report — compare the brokers that you have in mind to make sure that you’re going with the most reputable person. Investigate brokers with the Better Business Bureau or your state for any reports of unscrupulous activity.

Don’t be afraid to ask the brokers for references, certificates and awards. Remember, this broker will help you make a decision on one of the largest investments of your life. Gardner says it’s wise to do business with brokers who have worked in your community for several years, as they’re more cautious of their reputation.

“Their actions have consequences and they won’t be as likely to misrepresent you,” she says. If you’re new to an area, search for brokers through a national association such as the National Association of Mortgage Brokers, a nonprofit organization that has developed a certification program.

The group offers three levels of certification: the General Mortgage Associate designation for those with less than two years of industry experience, Certified Residential Mortgage Specialist designation for more experienced professional and the Certified Mortgage Consultant designation for those with at least five years’ work experience.

Consumers can check for brokers in their area at NAMB’s Web site, namb.org. Femiano says once you decide on a lender, work with them. Grow to trust them. Many problems can crop us as you move closer to settlement. “What borrowers should also be looking for is someone who will get job the done and deliver on a promise,” he says. “That’s more important than luring you with an interest rate that they can’t lock.”