What are the advantages/disadvantages of going through a mortgage broker?

Question

What might be some reasons people go through a broker instead of a bank or any other financial institution?

Answer 1

Advantage:

A mortgage broker can deal with multiple banks, so theoretically they can shop your deal around to get you a better rate, or they can get you loans with "less-than-perfect" credit lenders if your credit isn't that great.

Disadvantage:

A mortgage broker makes their money from the broker fee they receive from the bank and possibly any fees that they charge you. They may not necessarily have your best interests at heart since they may have different kickbacks from different banks so they may try to steer you towards a lender that gives them a larger fee.

Answer 2

I have looked at the previous answers they are mostly right.

Advantages

Mortgage brokers can get the same loans without additonal cost. As a matter of fact they can get the loan at the same cost as a bank.

If the mortgage broker get turned down by one or more lenders they can always repackage your loan using the same appraisal and credit report as you first got from them, without additional cost to you.

They could very well get you a loan at the bank that turned you down because of the bank's criteria for new business.

Since they are buying the loan from another source the criteria is a bit different.

Disadvantage

If you go through a bank and they don't have the program you are looking for and they have taken an application as well as run a credit report and got an appriasal. In order to go to another bank you have to start over because the new bank is gonna want all the necessary documents in his institution's name. So you will have to pay additional fees by purchasing the appraisal and credit report as well as the time lost filling out a brand new application. Waiting for the new underewriter to appriove or disapprove the application.

Answer 3

Disadvantage.

If you have good or very good credit your bank is the best place to go for a mortgage. Brokers will have to fight each other and cut their fees to close a number not worth it for them

Advantage.


If you have less than perfect or bad credit they are the ones to see. They hvae many ways to get the loan done.

When I was a broker I informed them of what I told you. My line was always " I am like a bookie. I make money from the fees and from the lender. no matter the bet i get paid."

Answer 4

An individual would go through a mortgage broker to get a creative loan like 100% financing, adjustable rate mortgages, interest only, FHA, etc.

We partner with dozens of brokers and could likely recommend 1 for you.

Answer 5

Advantage is they can shop around if you are hard to qualify or you need a special program.

Disadvantage is with extra people in the loop you have extra cost.

If you have good credit and are looking for the best rate on a traditional mortgage just go to Countrywide, the largest in the country. If you don't think it's the best then get a quote and shop around.