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Answers (18)
- Sharon Lewis, "Sharon Lewis"
- Contributions:3923
There are some great references here, one thing that we forget in the business is to put it into language that our clients understand, no shortforms . All in, good info though!
- Clay Branch, "Georgia Loans"
- Contributions:7838
I apologize, too, for getting into APR on this thread but it is important since many borrowers are now shoppng loans based on it, without examining the closing costs and terms. In response to the OP's question, it could be both, in other words the mortgage banker could be brokering the loan themselves, who knows. The important thing are the terms and the originators reputation.
Andy, look at this quote to see 1 quote at 4.5% / 4.87 APR / $4755 Fees, then compare to the quote above it at the same rate, lower fees of $919, but APR is 5.181%. The only way to manipulate that is to set the MI to fall off at 50 Months.
APR
Andy, look at this quote to see 1 quote at 4.5% / 4.87 APR / $4755 Fees, then compare to the quote above it at the same rate, lower fees of $919, but APR is 5.181%. The only way to manipulate that is to set the MI to fall off at 50 Months.
APR
- Andy Matejka, "tejks"
- Contributions:352
I've made too many assumptions and I apologize to the OP for taking it off topic and out of context.
- Clay Branch, "Georgia Loans"
- Contributions:7838
@ Andy - I agree with Andrew, APR is not the way to shop a loan. I will post an example of manipulation right here in a minute, as soon as I locate it, and would like your feedback, thanks.
- Andrew Adams, "203K Specialist"
- Contributions:9349
I don't agree. The only way to compare fees is to compare the actual fees. The APR was intended to make that comparison easy, unfortunately some lenders manipulate the APR to make their loan appear more attractive than it is. Junk in...Junk out!
The OP asked about Banker vs. Broker not about the APR.
- Andy Matejka, "tejks"
- Contributions:352
I am saying that comparing APRs is a good comparison of fees for a transaction. Wouldn't you agree?
Otherwise finding a lender one can trust proves paramount, especially based on all of the "spin" in these responses.
Otherwise finding a lender one can trust proves paramount, especially based on all of the "spin" in these responses.
- Andrew Adams, "203K Specialist"
- Contributions:9349
What does the APR have to do with spinning the benefit of broker or banker?
If you are going to Compare APRs Make sure to compare the fees included in the APR calculation. The APR can be manipulated.
- Andy Matejka, "tejks"
- Contributions:352
ajs_dcl,
If you find yourself in a position that appears to be SPIN as other professionals mention you can always compare the APR's of your quotes.
The Truth-in-Lending Act is there for your protection and benefit.
Good Luck
If you find yourself in a position that appears to be SPIN as other professionals mention you can always compare the APR's of your quotes.
The Truth-in-Lending Act is there for your protection and benefit.
Good Luck
- Dallas Banker
- Contributions:335
Andrew's right, it's all about spin. Although I am employed by a bank, we have multiple correspondent and broker relationships. I think the question should be about how comfortable are you with the person giving you that great quote? This is not a cookie cutter business. A great rate means very little if your loan doesn't close.
- HomeSand.net, "White Picture"
- Contributions:4398
Ajs_dcl,
I do not know how great the quote from the bank to you is, but if i were you, i go with the direct lender or the mortgage broker, cheaper rate from the direct lenders or the mortgage brokers then the banks.
I'm currently refinance my house with a local mortgage broker at 3.75%, 15 years term, no point, $3,000 fee, while the Citimortgage (from Citi bank) show 4.5%, 15 years term, with same closing cost, BankOfAmerica and Wells Fargo Bank are much higher rate.
- Andrew Adams, "203K Specialist"
- Contributions:9349
As a Mortgage banker that can correspond to a number of different direct lenders...I don't see what the difference is! Other than Spin...As a Banker we make the lending decision and fund the loan. We don't have to worry about what a lenders underwriting and condition review turn times are! SPIN!
- Andy Matejka, "tejks"
- Contributions:352
As a Mortgage Broker, I am familiar with the lending guidelines of a dozen different mortgage banks. What if the Mortgage Bank you have applied with doesn't approve your property as collateral or perhaps your DTI is above their guidelines or any other little glitch?
Well, that one bank will turn you down, leaving you to begin the process all over again.
Because mortgage banks compete Brokers for your business, many lenders provide you (us) with the 2 day Underwrite and 1 day for conditions that others claim as well.
Bottom line is to speak with enough lenders to find one who you can trust and who can answer your questions, manage your expectations, licensed, etc.
Well, that one bank will turn you down, leaving you to begin the process all over again.
Because mortgage banks compete Brokers for your business, many lenders provide you (us) with the 2 day Underwrite and 1 day for conditions that others claim as well.
Bottom line is to speak with enough lenders to find one who you can trust and who can answer your questions, manage your expectations, licensed, etc.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
ajs,
Broker has already been well defined.
Banker can be meant as several types of businesses.
A retail outlet for one FDIC Bank, as Wells Fargo.
A Banker may be a Broker with a Warehouse LOC. Their size varies. Credit lines may be small or large. They may have "Direct Lender" Relationship with one or several Wholesale Lenders and/or FDIC Banks. They might "sell" these loans directly back to the same lender or package them for the MBS Market.
A Banker may be a Correspondent Lender for one or several FDIC Banks. They underwrite and fund these loans, then "sell" them back to the same FDIC Bank that they funded the loan for.
Also, Direct Lender & Correspondent Lender are commonly used for both of these types of business.
Most Bankers also Broker Loans. Like other Brokers they may have a few wholesale relationships or several. Most FDIC Bankers do not Broker Loans. They only offer their products. .... Happy funding, Rudi
Broker has already been well defined.
Banker can be meant as several types of businesses.
A retail outlet for one FDIC Bank, as Wells Fargo.
A Banker may be a Broker with a Warehouse LOC. Their size varies. Credit lines may be small or large. They may have "Direct Lender" Relationship with one or several Wholesale Lenders and/or FDIC Banks. They might "sell" these loans directly back to the same lender or package them for the MBS Market.
A Banker may be a Correspondent Lender for one or several FDIC Banks. They underwrite and fund these loans, then "sell" them back to the same FDIC Bank that they funded the loan for.
Also, Direct Lender & Correspondent Lender are commonly used for both of these types of business.
Most Bankers also Broker Loans. Like other Brokers they may have a few wholesale relationships or several. Most FDIC Bankers do not Broker Loans. They only offer their products. .... Happy funding, Rudi
Stick with the banker!! Good luck!!
- Al Rodenburg, "Al Rodenburg"
- Contributions:27
Mortgage Bankers are directly underwriting and funding the loans. They act very much like a bank, as far as the consumer is concerned.
Mortgage Brokers send out the loan to be underwritten at a specific lender and typically have much less influence over the time frame and are subject to the lender's closing dept., funding policies/procedures, etc.(Lender funds the loan)
For example (I work for a Mortgage Banker), earlier this week, I needed a rush underwrite on a file and spoke with one of the owners of our company; he asked the underwriter to stay late and do the underwrite on my file.
It has been my experience that mortgage bankers should be able to provide lower rates for their clients, as well.
Long term relationships with a mortgage banker will probably be more enduring as there is a lot of consternation over the future of mortgage brokers (As a viable business entity, moving forward with all the new governmental regulations).
Hope this helps clarify things a little.
Mortgage Brokers send out the loan to be underwritten at a specific lender and typically have much less influence over the time frame and are subject to the lender's closing dept., funding policies/procedures, etc.(Lender funds the loan)
For example (I work for a Mortgage Banker), earlier this week, I needed a rush underwrite on a file and spoke with one of the owners of our company; he asked the underwriter to stay late and do the underwrite on my file.
It has been my experience that mortgage bankers should be able to provide lower rates for their clients, as well.
Long term relationships with a mortgage banker will probably be more enduring as there is a lot of consternation over the future of mortgage brokers (As a viable business entity, moving forward with all the new governmental regulations).
Hope this helps clarify things a little.
- ajs_dcl
- Contributions:5
Thanks a lot!
- shapiroamg
- Contributions:3058
A mortgage broker arranges mortgages with a bank or lender.
A mortgage banker will approve and lend out their own $ for a mortgage.
That's the basics but there are lots of levels nuance and details. In the end you should work with someone you trust to deliver what they promise. There are ways you can do due dilligance on the company you might work with for your mortgage.
- Geoff Boyd, "Mortgageproblog"
- Contributions:45
The big difference in today's market? It's that the large banks are very quietly attempting to squeeze most brokers out of the business. A quote form a banker may have some advantages, but it really will come down to service levels. many banks are taking 60 days to close a transaction, but many brokers are not much better. If this is for a purchase, make sure that the lender can meet your close date on time. otherwise this could cost you. If this is for a refinance, confirm all of the time frames involved in completing the transaction. You don't want to lose a rate lock because it takes them too long to close the transaction for you. Good luck !
What's the difference between a mortgage banker and a mortgage broker? Are there drawbacks to banker
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