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Updated almost 2 years ago on . Most recent reply

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Madylen Barberan
  • New to Real Estate
  • Cameron, NC
3
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10
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Is Using a Mortgage Broker Worth it?

Madylen Barberan
  • New to Real Estate
  • Cameron, NC
Posted

Hello, 

I was wondering if using a mortgage broker is worth it? I know they can save me time and possibly find me better terms, but is it worth the money when they are essentially just a middle man and I can shop lenders myself?

Thanks!

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Alex Bekeza
  • Lender
  • Los Angeles, CA
1,278
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Alex Bekeza
  • Lender
  • Los Angeles, CA
Replied

@Madylen Barberan Mortgage Brokers don't stay in business long unless they provide value. Anyone can pick up a phone and call every lender on google but that's not what a mortgage broker does. Good brokers understand the nuances between the different underwriting guidelines of a wide range of lenders and will understand which group has the highest likelihood of funding your deal and the best price and have years of experience working with different lenders so they can avoid potential roadblocks. Perhaps even more important is that many lenders offer wholesale rate sheets/matrices to the best brokers. This is a way to lower their cost of customer service and reward the brokers who bring the cleanest files in. For example, I only do Hard Money + DSCR but my colleagues in the office who do conventional can have you go on to Rocket Mortgages website, price your own deal, and then we can provide a quote in real time while you're on the phone where our rates and terms are leaps and bounds better based on many years of track record via Rocket's wholesale channel. In conclusion, you could never get the rates and terms that we as the broker could get you from one of the biggest conventional lenders in the country. The same is true in my world of Hard Money and DSCR, many of the lenders I use have retail loan officers but I have access to better rates than they can offer (plus way more experience in most cases). It's not uncommon for me to come across investors who have used the same lender a handful of times and then start using me for the submissions because I can get the same exact product for cheaper. Lastly, brokers don't get paid unless a deal closes. Retail loan officers are on a salary very often. That right there will tell you who is more motivated to get your deal funded.

I wise man once said "be faithful to your spouse, but have two lenders".  You should be familiar with a handful of lenders but also have a mortgage broker you trust with this since  your time is probably best spent doing something other than shopping for some 0.125% rate advantage somewhere since there's a lot more that goes into finding the right product than that. 

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