Is it better to go through a loan officer or directly to the bank?

[windhov]

I'm looking to obtain a mortgage loan. I am wondering would I save more money if I go directly to the bank for the loan? Or would it be better to go through a broker? I have excellent credit by the way.

[Amerikaner83]

With excellent credit you have access to the best rates available to both the loan officer and the banks... Try calling up both and see what the lowest rate you can get from each would be... I'm probably going to do ours with a loan officer... One who understands our situation our credit and most importantly our lives better than a huge bank would.

[ShortBus]

A loan officer is the stiff at the bank you talk to about a mortgage. You probably mean "Is it better to seek a mortgage directly with a lender or use a mortgage broker?" Brokers can generally get you a better deal because they shop lenders for you. However, I've done a lot work for mortgage brokers and I've never met a more shady group of people in my life. They're probably only a half-step up from JDB's on the food chain. My advice is to also seek out smaller, independent "mortgage bankers". They're kind of like a blend between the two.

But in the end, go with who can give you the best deal. You need to be shopping lenders almost as much as you're shopping houses.

[windhov]

Originally Posted by ShortBus

A loan officer is the stiff at the bank you talk to about a mortgage. You probably mean "Is it better to seek a mortgage directly with a lender or use a mortgage broker?"

I thought the bank is the lender? I don't mind shopping around to different lender myself, if I can cut away the middle man (mortage broker) to save money. How do you go to the lender directly?

[ditaloca]

Usually Mortgage brokers

(They are like used car salesmen though)


http://www.streetdirectory.com/trave...nk_lender.html

Where you end up with the best deal, so ....
The majority of people find that better deal with mortgage brokers. About 65 percent of home loans are originated through brokers.

Also brokers have to itemize certain charges and show where "points" assessed are comming from.
(You know all about the 'point' system of your interest rate?)

Here are 5 pieces of information to demand of your mortgage broker before signing anything

1) Yield Spread Premium - This is what the broker gets paid for marking up the rate of the loan above wholesale. The more of a markup, the more they get paid. It's the same concept as a car salesman being paid more based on
The more of a markup, the more they get paid. It's the same concept as a car salesman being paid more based on how much more he's able to convince his customer to pay above sticker, only the salesmen is your broker, and the desk manager is the lender. There's nothing wrong with the broker making a living, but it's perfectly fair to negotiate this figure, to protect your own financial wellbeing.

2) Current Wholesale Rates and Par Pricing - When a broker hears "What are today's rates?" what they're really hearing is "What rate would you like to sell me today?" When you're asking about rate, make sure to be more specific. "What's today's wholesale rate for a 5 year fixed at par pricing?" It's critical to mention par pricing, as that's the actual wholesale rate before any broker markup.

3) Mortgage Loan Disclosure Statement - It's all very well to accept what your being told at face value, but as my father always said, "a verbal contract isn't worth the paper it's printed on." Brokers will be more than happy to offer the consumer a GFE (Good Faith Estimate), but GFEs leave out some valuable information, like the YSP. You're entitled to an MLDS so make sure you get one.

4) Origination Fee - Make sure to take a look at the origination fee on the MLDS. Despite anything your broker tells you, this money goes directly to the broker's coffers, and is entirely separate from the YSP Your broker's goal is to make a point in front and one in back. That's ridiculous. In total, a point is reasonable, in a ratio negotiated between the you and the broker

5) No Fees/No Closing Costs - Nothing else in life is free, why would this be? Do you think the appraiser and underwriter are going to work pro-bono? Between the notary, escrow, title and other various services you'll need, the entire cost will be close to $3000 Obviously, "No Fees" companies make money elsewhere. Elsewhere would be the YSP. Sure, the dea may look great from the front, but the broker's surely making a killing on the back end

[jq26]

I'm currently in the same exact spot, dealing with both bank and broker and WILL lock something within the next five days. And I've done this twice before. IMO, if you have stellar credit and no complicated scenarios, then you'll do better straight through the bank. Otherwise, a broker will do just fine.

FYI- rates are absolutely fantastic right now, so don't mess around if you're ready to roll.

[ditaloca]

I have seen some things that say dealing with the bank is difficult because the banks don't have the same disclosure rules, so figuring out what your actually paying for is difficult.

The broker has to disclose it all in a semi easy way to understand.

They will have silly things like courier fees ect and you can usually negotiate those off.

If you have friends or family with good experiences ask them who their broker is.

Best bet is to call around get lots of offers make sure your comparing apples to apples and if you want to let the others know so and so is doing this for me so if you can beat that then we can do business.

I don't think its really a good idea to ever go with anyone thereal estate agent suggests ( that's cause I always wonder if their incahoots)


http://www.realestateabc.com/loangui...singcosts2.htm

[windhov]

Is there a way to check today's wholesale rates instead of relying on the broker's words?

[ditaloca]

There are places that will give rates but their always on mortgage broker websites or bank websites

If you know which type of loan you want or qualify for, like va or fha

[ShortBus]

Originally Posted by ditaloca

I have seen some things that say dealing with the bank is difficult because the banks don't have the same disclosure rules, so figuring out what your actually paying for is difficult.

Both are required to supply you with a GFE. It makes comparison shopping pretty easy.

[2ndTimeAround]

Originally Posted by windhov

I'm looking to obtain a mortgage loan. I am wondering would I save more money if I go directly to the bank for the loan? Or would it be better to go through a loan officer? I have excellent credit by the way.

Here's the scoop on the difference between banks, and brokers.

First living in Colorado - you are in a very high closing cost state.

Banks have lower closing costs (I use to be a broker). If that's the case why doesn't everyone go directly to banks?

First getting approved by a bank is tougher. Their loan conditions are more stringent. After you pay for an appraisal and a problem comes up (credit, title, etc), you loan is DOA.

On the other hand when you deal through a broker - they are affiliated with several banks where they can shop around if a problem arises.

Using a broker knows where to best deals are, but ultimately it is up to you to call banks and/or brokers to get the best deal.

Last Spring my wife and I refinanced, my credit score was 797, and went went through a broker. Got 4.5% fixed 20yr zero points, low closing costs.

Good Luck.....

[ShortBus]

Originally Posted by 2ndTimeAround

First getting approved by a bank is tougher. Their loan conditions are more stringent. After you pay for an appraisal and a problem comes up (credit, title, etc), you loan is DOA.

That doesn't make any sense. Brokers don't have any lending conditions since they're not the ones underwriting the loan. Whether you go directly through a bank or a broker, in the end, it's a bank (or insurer) that's going to approve (or disapprove) your qualifications. Now, a broker might be able to steer you into a different product if one bank says "no", but say a bank is "tougher" is a mischaracterization.

Like any kind of broker a mortgage broker is simply a middle-man. Travel agents, temporary staffing services, and credit counseling services are also middle-men. They take a cut in exchange for doing some of the legwork for you. Some brokers provide very valuable, specialized knowledge in exchange for their commission, while others are simply greedy businesspeople who prey on customers' ignorance. Personally, I'm a hands-on kind of guy who is quite adept as using Google. Combine that with innate distrust of anyone who's trying to sell me something and I rarely call upon the services any type of broker.

[2ndTimeAround]

Originally Posted by ShortBus

Brokers don't have any lending conditions since they're not the ones underwriting the loan..

ShortBus

Let me correct you, the brokers job is to initiate a completed 1003 loan application with a borrowers documents and the tri-merge credit report, to a prospective lender. In return that lender returns a form call "Loan Conditions", which states a borrower is preapproved if stated conditions are met. The broker has to chase(satisfy), all conditions before an Underwriter will accept loan.

After the completed appraisal (with appraisers license) and title search (which is initiated by the broker), then the physical hard copy folder is sent to the lender for final underwriting review. That's when additional conditions are brought up.

In the decade I was a L/O - I fought it out with many underwriters to get conditions waved and loans closed.

You said "Brokers don't have any lending conditions" they are the ones doing the dirty work satisfying the conditions from the underwriter....lol.




.

[windhov]

Thanks everyone for your inputs. I decided to go directly to the banks first and see if I can get a good deal. If not then I'll try a broker.

[morrow]

Originally Posted by ShortBus

Like any kind of broker a mortgage broker is simply a middle-man. Travel agents, temporary staffing services, and credit counseling services are also middle-men. They take a cut in exchange for doing some of the legwork for you.

To add to that...banks have fees too. Whether you are paying 1% orgination to a broker or a bank is neither here nor there, your still paying it. Nobody works for free.

Some brokers provide very valuable, specialized knowledge in exchange for their commission, while others are simply greedy businesspeople who prey on customers' ignorance. Personally, I'm a hands-on kind of guy who is quite adept as using Google. Combine that with innate distrust of anyone who's trying to sell me something and I rarely call upon the services any type of broker.

Judging from this response and your initial response about brokers and loan officers being "stiffs", greedy and are only out to take advantage of people...it sounds as though you may have had a very unpleasant experience with them, which is why you've chosen to take matters into your own hands by "Googling" information. The fact of the matter is, not all brokers/loan officers are terrible. So its a little unfair to clasify us as a whole.

[ShortBus]

Originally Posted by morrow

Judging from this response and your initial response about brokers and loan officers being "stiffs", greedy and are only out to take advantage of people...it sounds as though you may have had a very unpleasant experience with them, which is why you've chosen to take matters into your own hands by "Googling" information. The fact of the matter is, not all brokers/loan officers are terrible. So its a little unfair to clasify us as a whole.

"Stiff", "suit", etc. It was a play on the stereotype that bankers are humorous and inflexible. And I felt that I was quite even-handed on my assessment that some brokers are worth their commission and others are not. That judgment call applies to any type of broker, mortgage or other.

I mentioned upthread that I've done a lot of work for mortgage brokers and found many of them to be unscrupulous businesspeople. That experience is what I base my assessment upon.

[morrow]

Originally Posted by ShortBus

"Stiff", "suit", etc. It was a play on the stereotype that bankers are humorous and inflexible. And I felt that I was quite even-handed on my assessment that some brokers are worth their commission and others are not. That judgment call applies to any type of broker, mortgage or other.

Very well.

I mentioned upthread that I've done a lot of work for mortgage brokers and found many of them to be unscrupulous businesspeople. That experience is what I base my assessment upon.

I find this really unfortunate and Im sorry you had such a horrible experience.

[2ndTimeAround]

Originally Posted by ShortBus

... found many of them to be unscrupulous businesspeople. That experience is what I base my assessment upon.

That is a totally true statement, I have seen my share as well....

I didn't mean to beat up up in my past statement. For every one bad broker, there are 10 good brokers that do the right thing to help out borrowers.

[ditaloca]

I love my broker, I seriously have him on my christmas card list, he wasn't a stiff, he did do this weird thing on form letters where he acted like buying a house is like being on a cruise, and he was the captain, and there were lots of ports of call, one port was the underwriting port, etc... it was really weird to us but we got an amazing deal, he was upfront and fair with his fee's, he even made the appraiser charge a reasonable fee, whatever...
I love him, hubby loves him, we love our broker captains hat and all!

Everyone who knows us knows we love our broker.

[Amerikaner83]

I plan on getting my score/report from a bank and seeing what they can get us, and then take that to our broker and see what she can do with the bank's report/score.

I have a feeling we'll like the broker better