Many people are confused by the role of a mortgage broker in a real estate financing transaction. While not a requirement to secure financing for the purchase of a home or for the refinance of an existing mortgage, a mortgage broker is a professional who can often help to find mortgage options with the best interest rates and lowest fees. A good mortgage broker can also help to streamline the complicated process of applying for and securing a mortgage.

In most states, the licensing requirements for becoming a mortgage broker are not stringent, so there are some mortgage brokers who are less skilled than others. The good news is that there are a few simple steps you can take to help weed out the less-than-stellar mortgage brokers so that you end up working with a true professional.

If you are purchasing a home, ask your realtor for recommendations as to mortgage brokers. Chances are good that your realtor has worked with many mortgage brokers, including the best ones in your area. If you are purchasing a home or looking to refinance your existing home mortgage, ask your family members, friends, and neighbors for assistance with finding a reputable mortgage broker.

Once you have a short list of recommended mortgage brokers, it's time to ask each of them a few questions. Start out by finding out how many affiliations with wholesale lenders each mortgage broker has. In general, the more wholesale lenders to whom a particular mortgage broker has access, the better interest rates, terms, and conditions their loan options will have.

When the mortgage broker begins to provide you with interest rate quotes on mortgage loan options, inquire whether the interest rate the broker is quoting is from the wholesale lender or from the mortgage company. Usually, interest rates that originate with a wholesale lender are lower than the rates that mortgage companies themselves can offer.

Be sure to ask the mortgage broker about the points you will pay for each loan option. Points are a percentage of the loan amount and are how the mortgage broker gets paid. In most cases, a loan with points greater than one to one-and-a-half points is not a good deal for the borrower.

Finally, ask each mortgage broker for a Good Faith Estimate for your favorite loan option. A Good Faith Estimate shows you an itemization of all of the costs and fees associated with the loan. Scrutinize each item, and be sure to ask the mortgage broker about any expense you don't understand.