Is it better to seek a Mortgage from a Mortgage Broker or from a Mortgage Lender directly? I have met with various mortgage brokers and they all say that they get the best rates.
2006-07-28 02:39:36 · 6 answers · asked by nyclastof9 1 in Business & Finance ➔ Renting & Real Estate
Disclaimer: I am a mortgage broker / planner so I see this from my point of view.
But here's the main difference between a Mortgage Broker and a Mortgage Banker (lender).
A Mortgage Banker works for a single lender, and only has a set number of programs and options to offer you, and are captive to their own products.
A Mortgage Broker often works with 100's of lenders, including wholesale lenders (who often don't deal directly with the public consumer), and have a very wide range of product and lending options available to them.
Also, if you walk into your local bank, S&L, or retail mortgage bank they'll usually take your application there, perhaps underwrite your loan there, and lend their own money. If your loan is declined for whatever reason, you will need to begin the process again with another source. With a multi lender source, you have another chance if one lender doesn't approve your loan.
Which is better? Well from where I stand, I think a broker is better, but you still need to find one that will really do the due diligence work for you. Work that you would otherwise have to do by shopping your needs around to multiple lenders on your own. Rates aren't what your looking for with a broker, honesty and good communication skills are; outside of that all brokers have access to similar rates for the most part.
Hope that helps describe the difference in a not too slanted point of view.
2006-07-28 03:16:50 · answer #1 · answered by ReggieWjr1 4 · 10⤊ 2⤋
Mortgage brokers have access to the same morgage bankers & portfolio lenders. Therefore, they all offer the best rates.
Compare fees & don't be afraid to negotiate- particularly becaue most don't actually know anything about finance. In addition, try to work with someone that you trust because there is a strong moral hazard problem given the predominent market structure.
Get quotes from mortgage bankers & portfolio lenders. You can use these as leverage when negotiating.
Also, if you go with a broker, make sure that you know what he/she is getting on the back end. One might offer you lower fees, but the stated rate is above market. Because above market pricing, the broker can sell the mortgage for a premium to make up for the lower fees.
Information is your most powerful weapon!
Good luck!
Good luck
2006-07-28 02:51:48 · answer #2 · answered by Homer J. Simpson 6 · 0⤊ 0⤋
In all honesty, it really depends upon what your situation is. If you have great credit, a low debt to income ratio, and looking for a loan within the standard budget, either way is fine to go. A bank that you are currently using (or especially a credit union) will have comparable rates and sometimes no or low origination fees. Their rates will usually be about the same as you can get elsewhere.
However, if you have a few credit blemishes or want a stated income loan or there are some other issues, I would definitely go with a loan officer or mortgage broker just because of their ability to access wholesale rates and, knowing the industry well, being able to find the best program for you and your unique situation. You may be able to get a better rate or get approved for a loan that you wouldn't have been able to directly.
There are pros and cons to both, but the most important thing is to find someone that you trust and believe has your best interests at heart. There are few things worse than getting a surprise at closing that you can't fix because you dealt with a dishonest person.
Best wishes.
2006-07-28 06:39:07 · answer #3 · answered by K M 3 · 1⤊ 0⤋
Mortgage brokers will incorporate their fees with the lenders that they search.They are "hired guns" and have lots of ammo,but they will usually find "cheaper" rates. If you choose a lender on your own remember to read the FINE PRINT,as well as all the associated fees. A good broker or lender will all take the time to explain if you ask.
2006-07-28 02:52:05 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Networking and advertising. Brokers used to get non-stop faxes on their machines every morning advertising the latest rates from lenders. Now their email boxes are full of them. As many of the lenders will offer the same deals, it then comes down to service. How well has the lender worked with the broker in the past and that sort of thing.
2016-03-27 03:18:54 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Typically mortgage lenders are better to work with because they have their own source of funds. You never have to worry about your money not being there in time for settlement. I'm in Maryland, and every time we have to deal with brokers, the fees are WAY higher, because the lender himself charges fees, plus the bank funding the loan has tons of fees. Everyone will tell you they have the best rates, ask for a GOOD FAITH ESTIMATE, which is a written statement of what the fees associated with your loan will be. Get them from everyone you've talked to and see for yourself who can do the most for you.
2006-07-28 03:17:23 · answer #6 · answered by akc1106 4 · 0⤊ 0⤋
mortgage lender. mortgage brokers have high fees, i think.
2006-07-28 02:42:06 · answer #7 · answered by koifishlady 4 · 0⤊ 0⤋