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Brother, can you spare 3,000,000 dimes?

While it would be nice to make your decision by talking to a few people about who they used, who got a good deal, and who didn't, this isn't going to be your best bet. You should trust your coworker about where to get a good steak; you should not trust your coworker about where to get few hundred thousand dollars. Parsing out a fair deal on home mortgage rates requires good old fashioned business savvy and self-interest.

The skinny on these fat cats

Up front mortgage brokers (UMBs) are becoming a favorite among home buyers. The difference between standard mortgage brokers is subtle, but imagine the difference between paying a fee on top of a known wholesale price and being given a retail price without a clue about what the broker is getting from the lender. UMBs tell you what the lender is offering them and what their fees are; traditional brokers are only required to do so after the deal is complete.

This doesn't necessarily mean UMBs are always a better choice. There is still the issue of what you can negotiate. Familiarize yourself with the following concepts and talk to your mortgage broker or lender. It's the only way to secure a home mortgage like a pro.

Crash course in mortgage hunting

Indicate to your broker that you follow the market rates closely. Your mortgage rate will then be protected from surges invented by the broker. It will also arm you with knowledge to point to lower, real-time rates before locking in.

Make sure you see a commitment letter from the lender as soon as the broker has it. From time to time, a crafty mortgage broker will pocket your lock-in money if it looks unlikely that rates will rise. Of course, if rates do rise, he's in big trouble anyway.

Compare the home mortgage rate to the Annual Percentage Rate. If your loan is described as "no-cost" then these numbers should match up. If your APR is higher, you've got some fees in there that look a lot like "cost." On any loan, ask your mortgage broker to chat about what is making your APR higher than the advertised rate.

Any broker will low-ball at first. Upon dealing with you personally, there's always a reason you don't qualify for the advertised rate. But they know getting you in the door is the trick. Ask for a list of fees to be paid by you, the borrower, not the lender or any other third party. Being firm and clear will get an honest answer. And when in doubt, thank the mortgage broker kindly and wait for him or her to call you back.

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