Should we use a mortgage broker?
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Should we use a mortgage broker?
Posted by GeauxBlonde on 3/8 at 1:34 pm
After talking with a builder, he suggested that, as a first time home buyer, we should talk with a mortgage broker. He also recommended one that he deals with on a regular basis.

In all my house research, I never even thought about a mortgage broker. Can yall give me your thoughts on using one, pros/cons, etc. I don't have any knowledge in this area so any and all advice is appreciated.



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Posted by lsu tigerdog on 3/8 at 2:59 pm to GeauxBlonde
hope i can help, to be short, as mtg broker, we shop all the lenders for the best interest rate. the banks dont have that option. on any conventional or govt loan, no fee's from us, no points/origination cost, generally the bank will charge you some form of orignation/points plus their other junk fee's.

shoot me your email and I'd be happy to help you out, I'm here locally in Baton Rouge.



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Posted by rmc on 3/8 at 3:17 pm to lsu tigerdog
quote:

on any conventional or govt loan, no fee's from us, no points/origination cost, generally the bank will charge you some form of orignation/points plus their other junk fee's.


Not disagreeing -- but how do you guys make money?



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Posted by lsu tigerdog on 3/8 at 4:33 pm to rmc
Abt 2-2.5 yrs the fed reserve board changed our compensation plan. Now We get paid by our lenders, we have set compensation plan, we get paid the same regardless what the rate is. By doing this,it works better for the borrower.


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Posted by ItNeverRains on 3/8 at 4:57 pm to lsu tigerdog
quote:

hope i can help, to be short, as mtg broker, we shop all the lenders for the best interest rate. the banks dont have that option. on any conventional or govt loan, no fee's from us, no points/origination cost, generally the bank will charge you some form of orignation/points plus their other junk fee's. shoot me your email and I'd be happy to help you out, I'm here locally in Baton Rouge.


Shop both banks and mortgage lenders, anyone saying on every product available they have the best rate is writing a pretty big check if you get my drift.. And it varies mortgage lender to mortgage lender. I guarantee I know a bank on investment loans you can't touch.

The best thing you can do is know exactly what type of loan product you are looking for (97/3, 95/5, 80/10/10, 80/20, etc....) and shop both. You may very well get the best rate from a mortgage lender, but it is not always so.



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Posted by lsu480 on 3/8 at 5:25 pm to GeauxBlonde
The short answer is yes you should. Also, you should use two and have them compete to get the deal. Don't tell them you are working with someone else until the very end though.

This post was edited on 3/8 at 5:27 pm

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Posted by guttata on 3/8 at 9:11 pm to lsu480
I believe the mtg co gets a set par rate, say 2.75%. If you(buyer) want that par rate, you are going to pay all closing costs, in addition to the 1% or so the mtg co gets. If you do a no close loan with the mtg co, they will offer you a rate of around 3.75% with the bank paying the mtg co the 1%. Either way the mtg co is getting their 1%, either from you up front, or from the bank in the form of a higher interest rate offered to you. There is no way for you, the buyer to get that par rate and also have to not pay closing costs.


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Posted by JonTheTigerFan on 3/8 at 10:52 pm to ItNeverRains
quote:

Shop both banks and mortgage lenders


This is what you should do. Multiple hard credit inquiries of the same type are treated as one for FICO scoring purposes if done within a specific time frame. So if you get a couple of banks and a broker to pull your credit, it will only count against your score as if you had one inquiry. I just closed on my house 2 weeks ago and ended up going with a broker. They matched the amount of closing costs our builder's lender was going to pay and charged no points or origination fees. Good luck.



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Posted by csorre1 on 3/9 at 11:24 am to JonTheTigerFan
GeauxBlonde is my fiancé. Thanks for the input guys. We need to look for another broker to shop against the one that the builder suggested.

Good information about credit inquiries. I was curious if it would be a large detriment to have multiple sources put in inquiries. Very informative.

What is typical as far as closing costs are concerned with a broker? I saw the two options listed above. Does one situation seem more likely for a first time home buyer?



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Posted by guttata on 3/9 at 6:14 pm to csorre1
Seems like that depends on how long you plan on staying in the house. If you plan on staying a while, I'd pay the closing costs myself and get the lower rate. If you only plan on being there say 3 or 4 yrs, I'd probably save the closing costs and just pay the higher rate. I had my mtg broker just run the numbers both ways. In my case it was better for me to pay closing and get the lower rate. Just don't get fooled into thinking a no closing deal is that great. You could have gotten a better rate if you just pay the fees up front.


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Posted by rsande2 on 3/11 at 12:08 pm to GeauxBlonde
quote:

Should we use a mortgage broker?


I am currently doing a refi and the broker killed Chase and other banks on the rate. This was not the case several years back so definitely shop around. I did find the closing costs to be lower with the broker as well.



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Posted by JonTheTigerFan on 3/11 at 1:02 pm to csorre1
quote:

What is typical as far as closing costs are concerned with a broker? I saw the two options listed above. Does one situation seem more likely for a first time home buyer?


FHA or conventional loan?



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