Should I Avoid Mortgage Brokers? (loan officer, approve, cosigner, credit score)

[cyberphonics]

I've been calling around to different lenders talking to their consultants trying to find one with a lenient backend ratio (I'm at 49%) and leniency with payment shock but no luck. I had a mortgage broker referred to me who said he deals with tons of lenders all the time who'd work with me.

He has high credentials and references around here but as far as brokers go in general, I'm reading that working with brokers is more expensive. How much more expensive would using a broker be, hundreds? Thousands? Is that money out of my pocket? How does that work and are they generally not a good idea for other reasons?

Thanks!

[VictorBurek]

Yes. Talk to a broker, ask questions and compare the advice, rate and closing costs with any direct bank. You will probably get the best deal and service from the broker.

In my opinion, the worst option is calling a direct bank, but the only way you will find that out is by calling yourself. Please post back after you have spoken to the broker and a retail LO if any bank and let others know what your thoughts are.

[SmartMoney]

I say stay open to both, listen to both and see what they have to offer you.

You may find a pocket of portfolio financing with a bank that qualifies their buyers differently than traditional Fannie/Freddie/FHA. For example, up until this past Friday the bank I worked for allowed rental income on residences turned rentals, without any equity requirements........or we treated cosigners in the same manner as FHA. (The portfolio has been suspended while another portfolio lender gobbles us up so we can return as a portfolio lender on steroids. I am not on this site to solicit business, but share this experience as an example of what you can find).

Sometimes it's all about getting the deal done when no one else can do it.

[sunnyandcloudydays]

To be very honest a broker more than likely will be alot more experinced than a rep at a bank.
unless that person is way up in the chain at the bank


anyone left in the brokerage world pretty much knows their business

in addition a broker is going to have several channels for your loan vs a bank who has one narrow guideline or road to take you down and if you encounter any problems the loan is then put aside.

a broker is going to have many sources

please keep this in mind
lets say you have an fha loan just because its a certain fha guideline it does not mean a bank has to adhere to the fha rule an example

credit score lets say a minimum score per fha is 600 some banks wont even look at it if its not a 700score

[SmartMoney]

Please see responses in red.

Originally Posted by sunnyandcloudydays

To be very honest a broker more than likely will be alot more experinced than a rep at a bank.
unless that person is way up in the chain at the bank

Huh? Not sure where you got this tidbit. I've got over 25 years doing mortgage loans from every level, as do my many co-workers and counter-parts in the industry. We work for a bank, but we don't sit in a bank. We are called mortgage bankers. I know of more mortgage brokers that have crossed over the the banking side of business due to the new rules and regulations. Chances are, if they (anyone) does mortgage loans for a living, they come with decades of experience. This is no longer a business that the pizza delivery guy can do.
anyone left in the brokerage world pretty much knows their business

in addition a broker is going to have several channels for your loan vs a bank who has one narrow guideline or road to take you down and if you encounter any problems the loan is then put aside.
Again, huh? Not only do I have access to portfolio lending, but I can send my loans to Wells Fargo, Chase, BB&T, SunTrust, and GM and ING. But even better, I DON'T have to send the loan out for underwriting like a broker does. We are correspondent lenders and have delegated underwriting. We approve and close the loan in-house.
a broker is going to have many sources

please keep this in mind
lets say you have an fha loan just because its a certain fha guideline it does not mean a bank has to adhere to the fha rule an example

credit score lets say a minimum score per fha is 600 some banks wont even look at it if its not a 700score

Again, this is just incorrect. We deliver directly into GSE's and follow FHA guidelines without overlays. DO NOT equate with not doing a 600 credit score as not doing it because the score is 600. Chances are there's a whole lot of dirt that goes with why that score is 600. The broker always has overlays, because they do not service the loan and must depend on a lender.

I am far from anti-broker. I believe both banker and lender both have advantages and disadvantages, however, your sweeping (and inaccurate) statements are very misleading.

[devid68]

Thanks for your describe. I want to know more mortgage brokers.

[cyberphonics]

Hey everyone! Thanks so much for the advice. I contacted about nine different banks, both large and local, and also a local credit union and none of them were able to help me with financing that fits my situation for high debt to income ratio so I went with the broker and so far, he seems able to help pair me up with a good lender.

Even one of the banks I contacted said that I should go with the broker because he was one for 15 years and felt that he definitely was able to accommodate a wider variety of loan scenarios than he can now that he's a loan officer for a bank. Will update on how it all turns out!

[VictorBurek]

Originally Posted by SmartMoney

Please see responses in red.

i think the poster was talking about a retail bank loan officer..not a mortgage banker.