The Philadelphia Inquirer On Personal Finance column - You will pay for mortgage broker's help

Question:I am shopping for a house. Should I get a mortgage directly through a bank or my credit union? Or should I use a mortgage broker?

A:Although estimates vary, it's generally thought that about half of all American homeowners get their loans through mortgage brokers.

A good broker has access to loans offered by a wide variety of lenders, and will do much of the shopping around for you.

That's useful if you're unfamiliar with the various types of loans being offered. And it can be especially valuable if there's something tricky about your loan application -- a flaw in your financial record, for example.

But brokers charge for their services. Many will claim they are being paid by the lender. But the fee comes from the borrower's pocket one way or another -- typically through closing charges or a slight increase in the interest rate on the loan.

Of course, if the broker gets a low wholesale rate from the lender, the final rate may still be attractive despite the broker's markup.

The key question is whether you end up paying the lowest rate available in the marketplace at the time.

Even if you want the handholding you can get from a broker, shop around. Check with several brokers as well as banks, savings and loans, and your credit union. Ask each broker which lenders it deals with.

Many companies advertise mortgage rates in newspapers, and comparison shopping is easy with online services such as the one at www.bankrate. com, the rate-data provider.

Remember, though, that the online services don't reveal much about fees. Find a few with low rates, then phone for the details. Be sure to look for "points" paid at closing. Each point is an up-front fee equal to 1 percent of the loan amount.

The National Association of Mortgage Brokers has a referral service on its site: www.namb. org.

Question:How realistic is it to invest $4,000 in the stock market and double the money in a short amount of time? I would like to start small and, hopefully, double several times for about six months, and then use the gains for long-term strategies.

A:Yikes! The odds of doubling your money repeatedly with stocks over a short period are about as good as... well... doing it at roulette.

Consider the "rule of 72." It tells how long it takes to double your money with a given interest rate -- or the interest rate you need to double your money in a given period.

Just divide either figure into 72 to get the other. With a 10 percent interest rate, doubling would take about seven years, for example.

In fact, 10 percent a year is about what stocks returned in the 20th century, though they haven't done that well recently.

Of course, what really matters is how long it takes to double your money's buying power, which means accounting for inflation.

So if you assume stocks will return 10 percent a year and that inflation will average 3 percent, the real, after-inflation return is 7 percent. Divide that into 72 and you'll find it would take 10 years to double your money's buying power.

And that doesn't account for any taxes you'd have to pay.

Question: I invested 10 years ago in a mutual fund that did well but has a high expense ratio. I'd like to redeem my original investment and put it into another fund. Can I do that without paying taxes?

Answer: Not unless this was a tax-favored account such as an IRA or 401(k).

Imagine you started with $10,000 that has grown to $15,000 in a taxable account. The $5,000 profit is taxable as a capital gain.

Unfortunately, you cannot simply withdraw $10,000 and avoid this tax by claiming it's just your original investment. Since $10,000 is two-thirds of the investment's current value, it includes two-thirds of your profit, or $3,333. This is subject to capital gains tax at a maximum rate of 15 percent.