Profile picture for NarcJag

Broker or bank?

I am wondering if anyone can tell me the benefits of using a broker as opposed to going directly to a bank for a mortgage? I know that brokers can shop around, but do I have to pay more for my loan if I use a broker? Would they be able to find rates that are lower than what I could find if I just shopped around?

I was considering using a broker as our scores are not that great and it would be nice to have someone else who could do the footwork of finding a lender that would accept them. At the same time, if it means that we will end up paying thousands more over the life of the loan, I'd rather put in the work and do it myself.

Any insight into this would be greatly appreciated!

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 24 2012 - US
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (6)

Best Answer
Shop your loan to 2 Brokers and 2 Banks.  Rate is not everything.  Compare all of the fees and get it in writing.

You may not get an accurate quote until you actually source a property and have an offer on it.  The lenders (banks/brokers) are required to provide a GFE (Good Faith Estimate) of all expenses and fees.  Don
t worry about Taxes, Insurance, HOA fees when comparing.  Look for everything else.  It should be clear who is the winner, but also make sure they will CLOSE the loan.

I have found banks are not always the best bet.  Very difficult underwriting and bad appraisals.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 24 2012
The big banks usually take longer to close.   Go with a Mortgage Banker.   Depending on the loan your credit scores should not effect your interest rate or fees.   Conventional loans will have pricing hits and your rate or fees will be higher the lower your credit score is.   FHA is pretty much the same across the board for rates and fees.   

Work with a Zillow All Star Lender. 

Good luck!

Jake
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 25 2012
We have had great fortune with our broker with respect to appraisals. Banks have come to be very conservative, and in today's increasing market and its low inventory, buyers are willing to pay top dollar and appraisers are killing us. Appraisers look backwards and often do not take the incline into account. Simply, loans get DONE with our broker.
Further, brokers typically have greater experience, and their flexibility allows them to be extremely competitive. Our broker actually charges NO origination fee (typically 1% of th loan amount) on virtually ALL loans. This leads to a significant drop in closing costs
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 25 2012
I had two escrows nearly blow up earlier this year because Chase and BofA were inflexible regarding specific loan conditions. A local broker rescued both transactions, and both closed successfully. Brokers have the ability to shop around, and their fees and rates are very comparable to the large banks.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 25 2012
Since now all lenders need to offer a good faith estimate GFE it has become very easy to find who is offering the best deal.  Don't leave out credit unions, some of them are very competitive.  Happy hunting!
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 25 2012
Having lots of experience of both, I have come to the conclusion that the best answer is usually a broker who is also a direct lender. The main factors you need to consider are (a) is there any up-front cost, other than appraisal and credit report - that is to say. "Points", (b) what will your closing costs be and (c) what is your monthly payment. All much more important than what rate you get.

If you would like to contact me, I will be happy to refer you to my preferred broker.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 25 2012
 
Related Questions
Can I get a mortgage loan with little to no credit history?
Profile picture for andyridder76
Latest answer by andyridder76
2 hours ago | 7 answers
Can you get out of buying a home when it's really close to closing?
Profile picture for Dan Tabit
Latest answer by Dan Tabit
3 hours ago | 3 answers
I was defrauded by Century 21 agent
Profile picture for Pasadenan
Latest answer by Pasadenan
3 hours ago | 16 answers
I have 20% down for a $1MM loan, but the entire down payment will be gifted (family gifted)
Profile picture for Rebecca White
Latest answer by Rebecca White
10 hours ago | 2 answers
What is time length to wait for an offer to be answered?
Profile picture for Sharon Sapp
Latest answer by Sharon Sapp
11 hours ago | 2 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.