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You will do well to remember that mortgage brokers may look like acting for you, but they are not. They will obviously be working for themselves. Are we then to conclude that mortgage brokers can not be friends of their clients?

But new laws that are being contemplated could change the equation. A law passed by Illinois legislators earlier this month and backed by state Attorney General Lisa Madigan aims to do just that. The law envisages a "fiduciary duty" to mortgage brokers, making them legally bound to do the best thing for their clients. Similar laws are under consideration in other states in US. In Minnesota, legislators recently approved new rules defining mortgage brokers as agents of home buyers, requiring them to act in clients' best interest. But similar measures in Iowa and Colorado were defeated.

As things stand today, mortgage brokers have no such fiduciary duty towards their home-buying clients. Brokers regularly recommend loans driven by selfish interests because they stand to gain financially. It is certainly not unlawful for a mortgage broker to persuade a client into paying a higher interest rate for a loan so that he can pocket the difference, or to prevail upon a buyer to agree to a pre-payment penalty so the broker rewarded with a bonus from the bank.

A majority of home buyers run after mortgage brokers, primarily for two reasons - either they want a person to practically guide them through the mortgage process or they are keen on getting a cheaper loan. The first reason has no meaning as there's only one kind of loan - the traditional fixed-rate loan with 5, 10 or 20 percent down. You certainly do not require a mortgage broker to educate you about these choices. If you are a daredevil in taking financial risks, then you may opt for some weird loans, but even in that case, you do not need a broker to explain the nature of those loans.

As regards the second reason, it is true that a few brokers may be able to get you better terms. The only way to find out is getting two estimates from two reliable brokers and one from the bank on the same day for the same kind of loan. Always consider your broker as a commission agent having valuable expertise - butt ensure you keep him at arm's length without giving him any opportunity to exploit you.

Any mortgage broker will help you free of charge how to act on the three most important issues:

How to advertise effectively to attract as many prospective buyers as possible to inspect your home?

What types of mortgage loans does your home qualify for?

Will the intending buyer qualify for a loan?

You may end up wasting a lot of time with a buyer who sincerely wants to buy your home but does not qualify because of credit issues or inadequate income. This is where your mortgage broker can play a useful role. Besides, most people who view your home will not be candid or forthcoming with you but they will confide with a third party like a mortgage broker.

Banks invariably have only few programs and are not willing to work with anyone who has less than a perfect portfolio. But a full service mortgage broker has every conceivable loan product, which means your buyer will never be turned away. Most brokers have 40 to 60 different lenders and can usually get better terms and rates than a bank.