Is this a good way to get the best rate or could I save money by calling around for Mortgage Broker rates and applying directly to a bank?
We are about to buy a house. Our agent gave us the name of a mortgage
broker.
Is this a good way to get the best rate or could I save money by calling
around for Mortgage Broker rates and applying directly to a bank?
Mortgage brokers are very competitive and paid on commission.
Banks have various ways they earn money and generally do not pay
on commission. I have heard stories of slow moving loans in
banks, but the incentive of a commission usually takes care of
that when using a mortgage broker.
Bank rates are sometimes competitive, sometimes not. Call some
of each and find out. Mortgage brokers are safe, they probably
do most of the home loan and refi origiations.
A mortgage broker is FIRST and FOREMOST a SALESPERSON! They are selling
a loan to you AND usually selling your loan to a another lender. If you
know what they do you can take advantage of this and they MIGHT be more
responsive.
Banks sell loans too. They sell to you and they sell your loan to other
lenders. HEY THAT"S THE SAME THING MORTGAGE BROKERS DO! Give 'em a gold
star!
There is no guarantee that the broker will be "safer" (whatever that
might mean) and there is actaully a high probablity that they will NOT
be "cheaper". They are (almost always) a "middle man". Middle men TACK
ON COSTS!
You can get the same loan that the broker will find you, you just need
to shop on your own. Some lenders have aggressive marketing efforts,
while many do not. I know that the bank I got my last mortage at
doesn't make a big deal of their mortage operation. But if you call
them,they will match almost rate you can find (including points) and
they do most stuff "in-house". The money they loan me comes from CD's
and such from other customers. They keep most of their loans in their
own "portfolio". It kind of "Andy & Opie" type mentality to banking.
They have a moderate size base of customers and I like that.