Is a Mortgage Broker Worth It?

Question

Hi,

Is it worth it to go through a mortgage broker on my first deal? I would like to obtain an FHA loan to purchase a duplex to house hack, but I'm unsure whether or not I should go through an intermediary between the lender and myself. How does a mortgage broker earn their commissions? Would the borrower be the one paying the broker?

- Riley Blake

Russell Brazil · Answer

Their compensation models vary. Use a mortgage broker that gets paid from the lender.  I use a mortgage broker 100% of the time.  A good mortgage broker will get you a better deal from the lender than you would get yourself.

Stephanie P. · Answer

Hey Riley

The real answer is do your research.  Many local banks have great deals and want you to be a depositor.  Ask the loan originator if it would make a difference if you banked with them.  Some mortgage brokers are correspondent lenders and have overlays that they can't overcome, same with some banks.  Find a lender that answers your phone calls, that returns emails, that gives you a competitive rate with as little hassle as possible.

Hope that helps

Stephanie

Wayne Brooks · Answer

Also, going directly to banks, you don’t know which ones have unnecessary overlays, the mtg broker will.

Thomas S. · Answer

A good mortggae broker is essencial to your team as a investor. They do all th eleg work in shopping for your financing and are paid by th emortggae companies.

Knocking on bank doors is a waste of your time and will not find you the best deal in most cases.

Definatly cultivate a relationship with a broker for mortgage and  insurance.

Steve Vaughan · Answer

I've used both and have moved towards a couple community banks only the last few years.  I use them and send my buyers to them.  I have 3 solid relationships with commercial and residential and contract servicing banks.

I'm pretty sure I'm getting the best available rates and terms, with no origination fees, but the biggest reason is the relationships.  They keep stacks of deposit slips for my people to pay rent, notarize things and ask how they can serve me better.    When I want to Purchase an odd commercial industrial office rental with a house in back, I'll ask them.

Is a Mortgage Broker Worth It?

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