Anyone ever use a mortgage broker?

Question

Hey everyone, I'm looking to get pre-approved right now. I was going to go the route of calling up a bunch of potential banks and seeing what I could get. But I had a family member give me a referral to a loan broker recently. Sounds like he would basically take the leg work out of this process for me.

What's everyones experience been with working with a loan / mortgage broker? Do they come with extra fees? Would I be better off looking on my own?

Let me know :)

-Aaron

What's everyones experience been with working with a loan / mortgage broker? Do they come with extra fees? Would I be better off looking on my own?Let me know :)

-Aaron

Marcus Auerbach · Answer

So here are your loan options, from worst to best:

1. Online Lenders like Quicken or Rocket

2. National banks like Chase, Wells Fargo

3. Mortage brokers

4. local banks and credit unions

Most people think low rates and low closing cost is the main criteria. As an agent and investor I can tell you getting a deal under contract is first, getting it closed is second, everything else is not that important. Yes want good rates, but that is more like a pre-requisit than the main criteria.

Sellers and their agents will judge the strenght of your offer by your choice of lender. I have lost deals over financing, so if we have multiple offers, that's one way to weed out.

Mortgage brokers can become a middle men and a filter, slow down decisions and communication, pick a loan that pays more commission - I have had mixed results. Small banks are best, meet the loan officer, underwriter is two doors down, often common sense driven and invested in the comunity.

Like a car race, you need a great car and a fast driver - or a great bank and a strong loan officer. One is useless without the other.

Salvatore Lentini · Answer

@Aaron Macken - also depends on how hard of a loan it's going to be.  Meaning, if it's a slam dunk deal (ie: you're looking for low LTV, you have high W2 income, high credit score, property is worth more than you're paying, your tax returns are strong) you can get financing easily on your own.  If not, a broker will know which bank(s) to shop you around to.  Saving you not only time but the odds of getting to the closing table.

Richard Helppie-Schmieder · Answer

I wouldn't sweat it on your first deal. Try a few different brokers and you will eventually find someone that you work well with. I even used a bank that lost a deal for me one time. I soon found a broker that I used and closed 5 deals with shortly after.

Jeremy Isaac · Answer

There are plenty of brokers who have reasonable fees. One thing you can do is go on Yelp, type in a broker's name, and filter the reviews by typing keywords in the search bar like "fee," "points", etc. You'll often get answers here and it'll save you from getting annoying follow-up calls from several brokers who you're not going to do business with.

Basit Siddiqi · Answer

@Aaron MackenIf someone is doing work, someone is getting paid...and you are paying it.Time is money so it is okay for you to exchange money for time. You just have to be aware of it.

Aaron Macken · Answer

@Marcus Auerbach Thanks for your feedback. I didn't know the strength of the lender made an impact in the sellers decision. What's the issue with the bigger banks, aside from the fact that you can only have a limited number of loans from them? Is it the turnover time it takes to get the loan approved?

I'll see what I can do about reaching out to smaller local banks after I get a quote from this mortgage broker. Also I saw your youtube channel, great stuff!

Zachary Alexander lincoln · Answer

Hey their Aaron!

I am a licensed mortgage broker in the state of california NMLS# 1958027. Here is my personal advice when it comes to deciding between a mortgage broker and a bank. A mortgage broker can be much better or much worse depending on who they broker too and how their comp structure is set up. Most mortgage brokers like myself work on full commission. This commission is paid by the lender, not the borrower, and is added into the rate.

Most lenders have a lot of overhead from personelle and advertising which is why retail rates can be high. They do not have this overhead on the wholesale side which makes brokered rates more competitive provided they don't overcharge on their commission.

If I were to get a loan, I would go to a broker and ask him to right me a very competitive fee sheet and then go to other brokers and have them reduce their commission to get the best rate.

Luan Oliveira · Answer

You can still do both.

I've used a broker before, and they often have more options. In a lot of cases, brokers are paid a commission vs a straight salary, so they may be willing to work a little harder to please you. Sometimes a broker will give you a rate with points, which equate to added fees, but you should let them know in the beginning whether you are willing to pay points to lower your rate or not.

At the end of the day, what you're looking for is a Loan Estimate from each bank/broker you reach out to. That way you can compare rates/fees against each other. Keep in mind that some of the items in the estimate may differ from each other. Focus on the first page and the Loan Costs section on page two.

Luan Oliveira · Answer

You'll want to make the new job details clear to the loan officer/broker! Different lenders have different guidelines, so that's where a broker may come in handy by being able to shop your file though different lenders!

I've heard of the other Luan Oliveira! Unfortunately for me, I can't go 10 feet on a skateboard without having to jump off!

Aaron Macken · Answer

@Zachary Alexander lincoln that’s some good advice. I’m going to start shopping in January/ February time frame. I’ll try your strategy of having the brokers compete against each other and see how it goes! Cheers

Anyone ever use a mortgage broker?

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