As for all financial advisors, the best way to find a good mortgage broker is through personal recommendations from people you trust. Experienced real estate agents are also good resources because mortgage lenders know real estate agents can bring in a high volume of clients. Therefore, knowing a popular broker may mean a chance to get a slightly better deal than coldcalling a bunch of mortgage companies out of the Yellow Pages.

There's another problem with starting cold in your lender search. There are many lenders who identify themselves as mortgage brokers when they might really be consumer finance companies or lenders who loan out money at unnecessarily high rates. That's why it's critical to check with your state's banking or finance department. Staff there can tell you if any specific names you've gathered have landed on your state's list of lenders that have violated particular lending laws or have pending complaints. (See Appendix C.)