(Closed) Mortgage broker or no?

posted 6 years ago in Home
Post # 3
Member
9053 posts
Buzzing Beekeeper
  • Wedding: June 2010

A broker is great if you a) don’t want to shop around by yourself or b) need non traditional lending. Banks are known for being more conservative in heir approvals and having more limited products.  But if you’re a very low risk borrower they are often likely to have the lowest rate. 

We did ours through a bank since we have a long termrelationship with them and are both employed by the government. 

Post # 4
Member
519 posts
Busy bee
  • Wedding: May 2012

We tried looking at a few banks ourselves, and ultimately went with a broker. We have good credit and were getting fine rates from banks, but the broker ultimately found us a better deal with a credit union that we would have never found ourselves. Plus, with the broker you know exactly who to call and talk to if there is a problem, versus a bank where it is a little less personal.

Post # 5
Member
707 posts
Busy bee
  • Wedding: August 2013

We went with a mortgage broker and loved her! We initially started working with a loan officer from Wells Fargo and she was super flaky and not helpful whatsoever. Not to say that is typical of going directly through the bank, but I did like the small business customer service of working with a mortgage broker. She was SO quick to respond to everything and just wonderful to work with. She even sent us a pre-approval letter at 10 o’clock one night so we could put in our offer because we were bidding against two other people. 

Post # 6
Member
1695 posts
Bumble bee
  • Wedding: March 2012

I’m glad I found this thread. WE are working with a mortgage broker too…so far seems pretty good.

Post # 7
Member
7311 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

We went with a mortgage lender who was neither a bank nor a broker. They specialize in mortgage lending and lend their own money, then sell off the loans after the deal is done. We worked with 2 of these lenders throughout the house hunting process, then competed them against one another after we were under contract in order to get the best deal. For what it’s worth, we were very safe candidates for lenders. By competing 2 lenders we got a 3.5% interest rate with 0.75 points on a day when that same rate was going for 2 points. The competition on our loan lowered things by 1.25 points, which saved us $4800 in cash at closing. And buying those points to lower the rate will save us $31k over the lifetime of the loan. Competition FTW!

Edit: We worked with First Home Mortgage and Academy Mortgage throughout the process. Both gave us excellent service, and I would not hesitate to recommend them. Each company has loan offices throughout the country.

Post # 8
Member
43 posts
Newbee
  • Wedding: September 2012

If you are planning on a 20% down payment, fixed-rate 30 or 15 year mortgage, do NOT use a broker.  You would be paying a ~$3000 premium for no reason.  Instead go with a direct lender. 

The broker is ‘easy mode’ for such loans, but they can do very little for you that you can’t do yourself.  I will not speak to their viability for servicing FHA loans, VA loans, bad credit scores, or ARMs, as I did not need one of these.  And they may be able to help you arrange for a prepaid PMI deal that is cheaper if you can’t do a 20% down payment.  So for any ‘sub-optimal’ loan situation, they might be helpful to you.  But if you’re a prime lending candidate, don’t waste your cash.

But do NOT go with a major bank (Wells, BoA, etc).  Their rates will always be higher due to their operating costs.  Seek out a lender who can offer you the absolute best rate, which will probably be one that is smaller.  Amazingly, google advisor and zillow’s search tool will produce a number of useful results.

I recently closed on a 30-year mortgage with an interest rate of 3.625% with no origination costs or prepaid points.  There are many combinations of points and rate but basically you probably don’t want to pay more than 1 point at closing as the cost-benefit drops significantly after this.  The reason for that is complicated.

You will also want to be able to track the mortgage-backed securities that drive the rates offered on the marketplace.  The resource I use to do this is:

http://www.mortgagenewsdaily.com/mbs/

Basically this tracks the value of various mortgage ‘buckets’.  As lower ones become worth more compared to higher ones, prevailing market rates are offered in that ‘bucket’ range.  The important thing to understand is ‘higher value’ means ‘lower rate’. 

Post # 9
Member
13096 posts
Honey Beekeeper
  • Wedding: July 2010

@lovekiss:  “We went with a mortgage lender who was neither a bank nor a broker. They specialize in mortgage lending and lend their own money, then sell off the loans after the deal is done.”

We did the same.  Our mortgage lender was wonderful to work with and I really liked having the much more personal attention than you’d get at a big bank.

She was also able to get us a 3.875% interest rate with no pre-paid points and with only 8% down which we were quite happy about.

Post # 11
Member
799 posts
Busy bee
  • Wedding: June 2011

We went with a broker, who secured us a mortgage with a major national bank (CIBC here in Canada).

The thing I learned after meeting with various bank lenders and brokers…..brokers hands down had better rates, somehow even taking those rates and showing them to major banks they couldn’t beat them.

When looking for a broker, ask how the broker is paid. Broker’s can be paid by the brokerage they work for (flat rate/salary/non-commission) or paid by who they get the lending from. If a lender offers more money to that broker versus another bank/lender that broker may be more inclined to deal with that bank more and not necessarily always out to get you the best rate!

We went with an incredible broker (who were referred to and have since referred her as often as we can!) who gets paid non-commission and found us the best rate (between smaller lenders, private lenders, up to major banks).

Darling Husband and I both have public sector (government) jobs in Education, make plenty of money to qualify for a mortgage, didn’t have 20% down, and were first time home buyers, I am happy the route we went and with the mortgage we secured!

Post # 12
Member
10574 posts
Sugar Beekeeper
  • Wedding: January 2011

We’re planning on using one.  Some of the banks here won’t work with a mortgage broker, so we might also check out what those banks can do for us.  From what I’ve heard, here you’re better off not going with one of the big banks; their rates aren’t as competitive.

@MrBroccoli:  What is the premium from?

Post # 13
Member
231 posts
Helper bee

Ugh, we used a broker and I feel it was a total waste of approx $4K. If I had it to do over again, I wounot have ignored our realtor and gone around to banks myself and shopped for the best rate. Darling Husband and I have great credit and over 20% down, and even the broker commented on how easy of clients we were. If we ever sell our house and buy a new house, I certainly will not use a broker. 

Post # 14
Member
799 posts
Busy bee
  • Wedding: June 2011

@mcmillan0529:  I don`t understand, why did you have to pay $4k through a broker!

Post # 15
Member
10574 posts
Sugar Beekeeper
  • Wedding: January 2011

@Beebug:  I’m also confused!

In the US do you pay to use a broker?

Post # 16
Member
231 posts
Helper bee

@Beebug:  There was a broker’s fee of $3,850 added to our closing costs. I think it’s a percentage of the mortgage amount. At closing, when our attorney was going over all of the costs and such, she basically told us that we just threw that money away, had we gone directly through a bank, our other closing costs would have all been about the same, but there wouldn’t have been the $3850 broker fee. 

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