Brokers versus Direct (home loan, 30 year fixed, fees, rate)

[sneezecake]

Got quoted on a mortgage through a bank and a broker.

Bank qualified me for up to 175k at 5.75% on 30 year fixed
Broker qualified me for up to 400k at 5.375% on 30 year fixed - his fee is 1%

My understanding is that the fee can be either paid in closing costs or rolled into the loan and I can then pay like 5.5%.

My question is this - is there any analagous fee that the bank would charge me in closing, or in comparing directly these two loans, would the broker loan AUTOMATICALLY $3,000 more in closing costs (assuming it's not rolled in and a 300k loan)

[ChipL]

I don't know about an analagous fee, but they could charge you the same fee - 1% origination. Pre-qualifying for a loan is not the same as quoting costs. But if I were you, I wouldn't speculate or guesstimate. Get all fees in writing on a Good Faith Estimate from both parties.

[sneezecake]

Do most banks charge an initiation fee direct (but then not through a broker)?

I guess what I am getting at is that is there more to consider than just a better rate when comparing broker to lender>?

[ChipL]

There are can be three differences between a bank and a broker..program selection, rates and fees. Assuming it's the same program (and it sounds like your typical 30-year home loan), then all you have to worry about is how do the fees and the rates compare.

Banks can have similar fees to brokers. I'm a broker, sometimes I can beat the banks on rates and fees and sometimes the banks beat me. That's why I say get the GFEs to accurately compare.

[stevep]

I know you didn't ask this question, but there seems to be a huge difference in the amounts that you were pre-qualified for: $400k vs $175k. In today's mkt with the stricter guidelines, it would seem like these numbers would be close to each other. You might want to ask to determine why there's such a huge difference to see if someone has missed something in their numbers so that it won't negatively catch up with you during the underwriting process.

[renriq02]

You can't compare 5.75% with no points and 5.375 with 1point.

Stick with 1 rate, and see who has the best offer.
Also, stick with 1 loan amount......if you're not going to buy a home around 400k why are you going to entertain the thought?

Stick with one purchase price...figure out how much you can put down.

Banks are VERY conservative and dont have too many products to offer.

Originally Posted by sneezecake

Got quoted on a mortgage through a bank and a broker.

Bank qualified me for up to 175k at 5.75% on 30 year fixed
Broker qualified me for up to 400k at 5.375% on 30 year fixed - his fee is 1%

My understanding is that the fee can be either paid in closing costs or rolled into the loan and I can then pay like 5.5%.

My question is this - is there any analagous fee that the bank would charge me in closing, or in comparing directly these two loans, would the broker loan AUTOMATICALLY $3,000 more in closing costs (assuming it's not rolled in and a 300k loan)

[westchester]

shop it to everyone............and take the best deal.................... their is not right ans,,,,,vs either one good luck.............

[pghquest]

Originally Posted by stevep

I know you didn't ask this question, but there seems to be a huge difference in the amounts that you were pre-qualified for: $400k vs $175k. In today's mkt with the stricter guidelines, it would seem like these numbers would be close to each other. You might want to ask to determine why there's such a huge difference to see if someone has missed something in their numbers so that it won't negatively catch up with you during the underwriting process.

That was the very first thing that I noticed.