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Are mortgage brokers a good deal?
Posted on 5/2/14 at 2:12 pm
Posted on 5/2/14 at 2:12 pm
I know mortgage brokers are middle men who have to get paid some how. I'm assuming that ultimately it is the borrower who pays for their services even though it may be wrapped up in the loan product and appear that the lender is paying.
Most of the time the idea is to "cut out the middle man" because of the extra cost. So, why is using a mortgage broker a good idea for a borrower compared to checking choosing three lenders (e.g., Wells Fargo, Quicken, and a local credit union) and working directly with them to compare and get the best product?
Yes, I'm about to shop for a mortgage and want to get the best deal possible. Broker or no broker?
Most of the time the idea is to "cut out the middle man" because of the extra cost. So, why is using a mortgage broker a good idea for a borrower compared to checking choosing three lenders (e.g., Wells Fargo, Quicken, and a local credit union) and working directly with them to compare and get the best product?
Yes, I'm about to shop for a mortgage and want to get the best deal possible. Broker or no broker?
This post was edited on 5/2/14 at 3:04 pm
3
Posted on 5/2/14 at 2:20 pm to elposter
There really is no middle man to cut out.
Either the mortgage officer at the bank is getting paid a % and the bank keeps the loan
Or
The broker does the work (same as the banks rep would) and they get paid that % and sell the loan tothe bank
Either the mortgage officer at the bank is getting paid a % and the bank keeps the loan
Or
The broker does the work (same as the banks rep would) and they get paid that % and sell the loan tothe bank
Posted on 5/2/14 at 2:21 pm to elposter
Just find the best interest rate. Thats really your ultimate goal aside from a cash deal
Posted on 5/2/14 at 3:01 pm to Mr.Perfect
quote:
There really is no middle man to cut out.
Either the mortgage officer at the bank is getting paid a % and the bank keeps the loan
Or
The broker does the work (same as the banks rep would) and they get paid that % and sell the loan tothe bank
Didn't really think about that. If there is no additional cost to the borrower by using an "independent" mortage broker, then using a good independent broker seems to make sense since they can essentially shop for the best deal among more choices than the bank's internal "broker" who is limited to their bank's products.
Posted on 5/2/14 at 3:13 pm to elposter
quote:
If there is no additional cost to the borrower by using an "independent" mortage broker, then using a good independent broker seems to make sense since they can essentially shop for the best deal among more choices than the bank's internal "broker" who is limited to their bank's products.
I recently with an independent broker, and his rates were better than either of my banks, insurance company or anywhere else I checked. And the closing costs actually were projected to be lower.
Also, it depends on the housing market. Where I live, stuff is selling in a day. Having a mortgage broker can help you get a house, since they will do more for you than the bank.
Posted on 5/2/14 at 4:22 pm to elposter
quote:
then using a good independent broker seems to make sense since they can essentially shop for the best deal among more choices than the bank's internal "broker" who is limited to their bank's products.
I would say so. And i know a lot of great mortgage bankers that work at banks, but there are also a lot that are pretty lethargic because they know X number of people will walk in on a monthly basis.
I have done one with Chase and one with NOLA lending. both went fine. Just get a competent individual to work your file and have all the information ready.
and to my earlier point.... Chase kept their loan and NOLA sold me to Wells Fargo. Both are problem free.
Posted on 5/2/14 at 4:28 pm to elposter
quote:
Didn't really think about that. If there is no additional cost to the borrower by using an "independent" mortage broker, then using a good independent broker seems to make sense since they can essentially shop for the best deal among more choices than the bank's internal "broker" who is limited to their bank's products.
Depends. I always shop a couple brokers and a couple banks to see who has the best rates. Best money wins. About 50/50 banks vs brokers
Posted on 5/2/14 at 4:36 pm to ItNeverRains
quote:
I always shop a couple brokers and a couple banks to see who has the best rates. Best money wins
true... just make sure they are not ALL pulling credit. You will never get approved
Posted on 5/2/14 at 8:00 pm to Mr.Perfect
Get your tri-merge pulled with one, and then find all three scores out. Then shop all the other brokers with your loan scenario.
They all have access to rate sheets based on Credick score and loan to value based on program. It ain't hard for them to find your deal. Whomever quotes the best rate, run with them.
Happy Hunting...
They all have access to rate sheets based on Credick score and loan to value based on program. It ain't hard for them to find your deal. Whomever quotes the best rate, run with them.
Happy Hunting...
Posted on 5/2/14 at 8:14 pm to GFunk
quote:
Get your tri-merge pulled with one, and then find all three scores out. Then shop all the other brokers with your loan scenario.
Bingo
Posted on 5/5/14 at 5:57 am to ItNeverRains
I went with a broker last time and my mortgaged ended up with Chase which was fine. This time I went directly to Chase since I didn't want my mortgage to be sold off anywhere else. No issues either time.
Posted on 5/5/14 at 1:39 pm to elposter
a broker who knows what he is doing is the key. i have been a broker,lender and now a banker and the biggest downfall of brokers is them sending the loan to some company that takes their sweetass time with the loan. shop the fees and the rate. in the end thats what really matters. best of luck to you.
Posted on 5/5/14 at 2:09 pm to hawkeye007
Just curious, what's a good 30 year rate today?
Posted on 5/5/14 at 7:15 pm to LSU1018
Closed an RD 30 year fixed at 3.625% a year ago next week.
I think they're hovering somewhere near 4 and an 8th and 4 and tree quotahs those days...
I think they're hovering somewhere near 4 and an 8th and 4 and tree quotahs those days...
Posted on 5/5/14 at 7:22 pm to GFunk
To answer the OP, I don't find brokers to be a good deal. All my Iowa mortgages, plural, are with the local bank, and both their rates and fees are very competitive. In Florida, it's gotten tougher, but I'm not buying anything additional. In Wisconsin, I used a local bank there as well.
I've never seen what a broker brings to the table except higher fees. I'm sure someone could make an argument the other way, but I have more than one mortgage, and I've never seen value added by a broker, only value detracted.
I've never seen what a broker brings to the table except higher fees. I'm sure someone could make an argument the other way, but I have more than one mortgage, and I've never seen value added by a broker, only value detracted.
Posted on 5/5/14 at 9:39 pm to Iowa Golfer
You are confused or the business where you are is poor for brokers. A broker can do two thing, lower the rate or lower the fees. In a mortgage the most important thing is rate. Most closing costs will be made back in the first 5 years.
Yeah a local bank won't have large fees, but the rate is higher, and most won do past 10 years. If they do, then they are brokering the same as the independent guy and will be sold to someone else. Small banks can't tie up that much money for that long.
Big banks, won't have up front fees, but won't give you a lower rate than a broker. Also, banks aren't regulated the same as brokers and don't disclose all their fees, so if a bank quotes you a rate you can always find one lower. A broker has a choice, that can charge on the front or the back, it depends on their agreement and what they want to make. What is an origination fee if you save thousands because of a lower rate.
Never go back with your same lender for convenience, they will not give you a lower rate that is market competitive. Just think about it.
How much does it cost to keep huge branches operating,etc. A broker can send it to different places and keep his costs low.
The most important thing about it is educate yourself. I've spoken to hundreds possibly thousands of idiots who went with the bank because they offer no closing costs after removing the fees from my GFE. The idiot could not understand why my payment was less, couldn't understand a lower rate and how to calculate it, etc.,etc.
Also, those no closing cost deals never match up on the HUD 1, I know I've closed them and I've beat them. Just shop for a low rate, but be smart enough to understand that each mortgage stands on its own.
The homeowner has credit, job, income, etc.No two are ever the same.
Each house has value, equity, etc., none are ever the same.
The worst mistake someone can do is doing everything with one person for convenience.
Use a Realtor who is a Realtor, not also a broker.
Don't use who they recommend unless they are competitive with two other brokers. Shop attorney;s, there are too many now, they are making more than the brokers on some deals.
The government has screwed up appraisals, so they going to cost and often won't be good.
Just educate yourself.
Yeah a local bank won't have large fees, but the rate is higher, and most won do past 10 years. If they do, then they are brokering the same as the independent guy and will be sold to someone else. Small banks can't tie up that much money for that long.
Big banks, won't have up front fees, but won't give you a lower rate than a broker. Also, banks aren't regulated the same as brokers and don't disclose all their fees, so if a bank quotes you a rate you can always find one lower. A broker has a choice, that can charge on the front or the back, it depends on their agreement and what they want to make. What is an origination fee if you save thousands because of a lower rate.
Never go back with your same lender for convenience, they will not give you a lower rate that is market competitive. Just think about it.
How much does it cost to keep huge branches operating,etc. A broker can send it to different places and keep his costs low.
The most important thing about it is educate yourself. I've spoken to hundreds possibly thousands of idiots who went with the bank because they offer no closing costs after removing the fees from my GFE. The idiot could not understand why my payment was less, couldn't understand a lower rate and how to calculate it, etc.,etc.
Also, those no closing cost deals never match up on the HUD 1, I know I've closed them and I've beat them. Just shop for a low rate, but be smart enough to understand that each mortgage stands on its own.
The homeowner has credit, job, income, etc.No two are ever the same.
Each house has value, equity, etc., none are ever the same.
The worst mistake someone can do is doing everything with one person for convenience.
Use a Realtor who is a Realtor, not also a broker.
Don't use who they recommend unless they are competitive with two other brokers. Shop attorney;s, there are too many now, they are making more than the brokers on some deals.
The government has screwed up appraisals, so they going to cost and often won't be good.
Just educate yourself.
Posted on 5/5/14 at 9:47 pm to tiger94gop
I'm not confused. My loans are in house, and I wrote the checks for the closing costs at closing. I know what the rate and terms are. I know what I wrote the check for at closing for all the fees, including appraisals. I also looked the the broker's rates and fees.
To each there own, but until a broker can close a loan for $1,500, and give a rate well under 4%, I stand by my statement. The brokers added no value, in fact, they detracted value.
Now, it is probably true I am not the average guy walking in the buy my first home, or refinance one home mortgage. It is also true I'm not a REIT to receive special treatment.
To each there own, but until a broker can close a loan for $1,500, and give a rate well under 4%, I stand by my statement. The brokers added no value, in fact, they detracted value.
Now, it is probably true I am not the average guy walking in the buy my first home, or refinance one home mortgage. It is also true I'm not a REIT to receive special treatment.
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