The quick answer is NO you do not have to pay an appraiser to get a bank or broker's fees. You simply ask them about their fees and once you have chosen the lenders who state the fees that you are OK with, then you will fill out a "1003" application and submit it to the lender. By California law the lender must give you a "good faith estimate" within 3 days of taking your 1003 form.

After the loan is in process then an appraisal will be ordered, if necessary, on the subject property.

Yes, getting a loan through a broker is harder now than before. It is typically easier to go direct. The reason for that is that the banks have more control on files and borrowers when their own agents are involved.

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Finding the lowest mortgage interest rate and lenders/broker fees is very important. Why? They want the lowest payment at the lowest cost possible. However, I think there is more to the lowest rate and closing costs.

When selecting a mortgage, one should first answer the following questions:

1. Is this home for the satisfaction of my current life style or for retirement?
2. Is my income going to increase, stay the same, or decrease in the next five years?
3. Am I going to have any big expenses in the next five years (i.e. new car, new baby, college expenses).
4. When do I want to have my mortgage paid off?
5. At what age do I want to retire?
6. What payment do I feel comfortable making?
7. What is more important? Building my net worth or lowest closing costs?

These are just some of the questions you should ask yourself before even shopping for a mortgage.

Like I said before, lowest rate and closing costs are important. However, the lowest cost over time and stability is more important. The lowest cost over time will allow you to use your savings and allocate them in a liquid investment (i.e. mutual funds, universal life insurance, annuities), which you will earn a higher rate of return. At the same time you are increasing liquidity, safety, rate of return and tax deductions. Eventually, you will also reach the freedom point where your assets exceed your liablities.

A mortgage is not just a loan; it is one of your most important financial planning tools. You should work with a Mortgage Planner who will take the time to create a Mortgage Plan that you can integrate with your short and long term financial plan and investment plan.

Also remember before you start shopping for rates and closing costs, a true mortgage professional will not quote you any interest rates or fees before they sit down and have an intelligent conversation about your payment and equity objectives and your current financial situation. If they do, that is considered malpractice. It is very unprofessional and it is not fair to you. These loan originators that pracitce this way, which are called order takers, are the ones who have contributed to this mess the mortgage industry is experiencing.

Regardless if the mortgage professional is a direct lender and/or broker, make sure they can add value to your mortgage experience by providing you with a Mortgage Plan; not just a low rate and low closing costs.

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