Reaching out directly to banks vs. using a mortgage broker

[Evan Lagerloef]

Hi All,

I am currently looking to buy my first personal residence but will also be looking to buy my first investment property this year as well. For my personal home, I am looking for a fixer upper to basically do a live in flip. Ideally I would like to live there for at least 2 years and fix it up while I am living there, doing as much work as possible myself to save $$ and to learn more about rehabs.

I am planning on starting the pre-approval and loan process but I wanted to get some advice on working with banks vs. working with mortgage brokers. My credit score is pretty good, I have a W-2 job, and a decent amount of cash saved up for a 20% down payment.

Is there a time or situation you would prefer working with one over the other?

Should I just work with both and see where I get the best rates?

What are some pros and cons of both?

Any advice is greatly appreciated! Thanks

[Frank Wong]

Hi Evan,

I suggest you contact 1 bank and 1 mortgage broker.  I would start with your mortgage broker first. This way they have done the shopping for you.  Then you can all around banks and just ask them what their rate and fees will be.  You need to give them your credit score or how much down. They may or may not give you a rate.  If you get a referral from your realtor then most likely they will just quote you.  When you are shopping for rates make sure you call the same day.  Rates change every day and you want to compare apples with apples.

Other things to remember.  It's not always about the rate.  You need to know how fast they can close.  The norm in my area is 30 days or less.  You don't want a lender that closes in 35+ days you will never get your offer accepted.  You also want to know how fast the lender will appraise and give you a full loan approval.  My area we are looking for 7-12 days.  Anything longer than 15 days you will never get your offer accepted on a competitive house.