Using a broker or not?

[TheMortgageSPY]

I can look over the numbers for you. No problem I left working within a BANK so I can properly inform us so called little people.

[dad2jules]

Originally Posted by FalconheadWest

Yes, this is norm. Many times, fees are contingent upon what your credit looks like. If you have "not so great" credit, it takes more time, effort, and work to get a loan approved, so you might be charged 1.5 points instead of just 1 point to get the loan done. Many times, if a company that funds their own loans can't do your particular loan because of a credit situation and they have to broker your loan, they'll charge another .25%.

So, yes, they want to see your credit before committing to any comments about fees and such.

Your statement is true but not for the reasons you state. Fees are higher for lower credit scores but not because the loan is more work, but because the loan is riskier to the lender, the broker doesn't get the additional fee.

This is how it works.

You have a 20% down payment and want the wholesale rate. Based on credit score these are the fees for each credit score range:
>740 1% to broker and 0% risk based discount point
720-739 1% to broker and .25% risk based discount point
700-719 1% to broker and.75% risk based discount point
680-699 1% to broker and 1.5% risk based discount point
660-679 1% to broker and 2.5% risk based discount point
640-659 1% to broker and 3% risk based discount point
620-639 1% to broker and 3% risk based discount point

The discount fee(risk adjustement) is typically not paid but offset with a higher rate. Th full grid as published by fannie mae is at this link.

https://www.efanniemae.com/sf/refmat...llpamatrix.pdf

[Modification Specialist]

Originally Posted by chet everett

The various online sites are nothing more than lead generation tools. That means they take your info and then make money selling it to other people in the marketing areas of lenders. Once upon a time that was not the case but with the collapse of most lenders that had multiple channels for loan origination the online business changed dramatically.

Secondly most mortage brokers have a greatly reduced number of lenders that they work with, offering far fewer options,and with leeway in the kinds of deals they can assemble. As VB notes, the surviving mortage brokers are still around because they can offer the clients that the work with a streamlined path. Many of the larger banks are still a mess with waves of layoffs and forced mergers resulting in a mishmosh of unrestrained overworked staff. It is not impossible to get good service from such lenders, but the odds do not favor it.

The decision you make should be based on the recommendations you get as to service and value. Folks that shop on both generally can be trusted...

Sorry I am a little late... Way to go Chet, good job explaining....!!!

The decision you make should be based on the recommendations you get as to service and value.

[sallyg]

VictorBurek- you mentioned on another thread that there are only two lenders, Guaranty and another one- maybe AFR- that have loan options for people w credit scores below 620. So would a mortgage broker buy loans directly from either of these lenders if they were working w someone w poor credit score? Would it be an FHA loan or something w incredibly high interest rates? Would it be best to work directly w either of these lenders- as opposed to working w a broker- if these are their only options?? thanks!