mortgage broker or direct to lenders

I’ve read the pros & cons of broker versus shopping direct. Brokers have a conflict of interest, but hold your hand. Banks are slow and may not show you all the options. Truth is I need a bit of hand holding in this process. I’ve been talking to www.newdealmortgage.com They seem very good, explain all the details, and have been very responsive to pickup the phone, and followup. I know they have incentive to do this. Their fee appears to be paid by the bank. I’ve heard that banks & brokers collude sometimes, to steer you to certain products. How much risk do I have here? If I pay an extra $1000 hidden fee, frankly I think the guy is worth it. But if I’m stuck in some product that will dog me for years, or will cost me 10’s of thousands over the longer term, that’s a concern. How do people navigate this? -Sean

hullsean

in Mortgage 11 years and 7 months ago

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vthatcher | 11 years and 5 months ago

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Sean, Bottom line is this. If you find a good mortgage broker you will get a great deal. When comparing deals, pay attention to the rate offered and the total cost involved. Be sure to compare the “buckets” of the GFE. The only really big difference broker to broker or bank to bank should be the top bucket on page 2 of the good faith estimate. A broker can offer a better deal than a bank, lender paid or not. If the broker chooses a lender paid option, they have to upsell the interest rate to cover that rate which in that case would be comparable with a bank. A banker does not need to disclose they compensation made on the back of the loan in SRP. They do have to disclose origination fees paid on top of the compensation that you don’t see. A broker, has to disclose their fees no matter how they are paid. I am a broker. Vanessa Thatcher Senior Loan Officer NMLS# 41404 Atlantic Home Capital 4175 Veterans Memorial Hwy, Ste 310 Ronkonkoma, NY 11779 Office: 631-687-3510 x106 Direct Dial: 631-468-8809 Direct Fax: 631-918-5222 Cell: 631-672-4113 “Pennies don’t fall from heaven; they have to be earned here on earth” ~Margaret Thatcher~ Website: www.atlantichomecapital.com You can catch me in the directory at www.Brownstoner.com www.montauk-online.com http://brickunderground.com/directory/listing/guide/mortgages NEW SITE http://www.bktothefullest.com

brucef | 11 years and 7 months ago

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Hi Adam, Bruce here. Adam helped us with a complicated mess, so I absolutely recommend his knowledge and work ethic.

cate | 11 years and 7 months ago

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Brokers are required by law to state all fees up front. No conflict of interest. Beware of brokers who are also lenders. There is a conflict there.

mortgagepro | 11 years and 7 months ago

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Sean, I am admittedly biased, but felt it appropriate to comment. I do not see how a Mortgage Broker has a conflict of interest. Our fiduciary responsibility is to the borrower and the borrower alone. Yes, we have wholesale relationships with dozens of lenders, where we are required to fully qualify and process a complete loan package for Underwriting approval by the lender. We handle the appraisal order, the gathering and clearing of any Underwriting conditions, and then coordinate the closing. Most importantly, we are readily available and will treat you as an individual. For over 20 years many of my clients have become personal friends as this is often one of the biggest transactions a person will have. That sticks when it proves a positive experience. While a borrower can opt to directly pay a Mortgage Broker Fee, most files are set up a Lender Paid Broker Compensation. In many cases the educated broker knows the ins and outs of each lender’s idiosyncrasies, as they do vary. With each scenario being unique this can be one of the most important benefits of utilizing a broker (as they have 20 conduits with different facets, where walking into a bank is one lender that may not be the best conduit for your scenario). A good broker will fully discuss your goals and present all products available and measure the benefit of each one with your goal as well as your personality (i.e. even a borrower plans on keeping the property for a short time an ARM is not for everybody). The Mortgage Industry has changed a lot over the past 20 years. Hidden Fees or any surprises do not fly and transparency is one of the strongest qualities of a good broker. There are also strict tolerances to disclosed fees and anything past these tolerances would require re-disclosure or otherwise prevent a loan from closing. I am not familiar with the company you are speaking with, other than looking up their NMLS# and seeing they were established in 2008\. It is excellent to use this Forum for feedback and you can also search the archives for many comments and reviews of the mortgage brokers that frequent and contribute to this Forum. As with any large transaction I would always suggest getting a quote from at least one other company, just to make sure everything is in line. Referrals are the good mortgage broker’s best asset. Ask others and see what you find. -Adam Roberts South Shore Mortgage NMLS# 1310 P: 631-956-0111 x218 adamr@fast2fund.com