mtg broker (PMI, loan officer, escrow, real estate)

[SamNC]

what do mtg brokers actually do? Do they just serve as a clearinghouse and can give you a loan with banks they do business with? any benefits of doing business with a broker?

My agent wants me to go through a broker, but it is VERY obvious to me that she is looking out for her own interests and just wants a sale, so I am taking what she has to say with a grain of salt!

[vukinjo]

I think brokers are useful when looking for an out of the ordinary loan but personally I like to just go through a lender myself. It kind of depends on your own purchase circumstances but for me, I was looking for a basic 30yr fixed loan on a modest purchase price. I talked to both brokers and several lenders and found Bank of America's No Fee Mortgage Plus to be ideal. It allowed me to put 5% down without having PMI and they paid all the lender and title company costs. I paid 1 pt to buy the rate down and I had 1 day of prepaid interest, 1st year of homeowners insurance and my HOA dues and setup fees but all other closing costs were waived or paid for by BofA. You don't even have to escrow if you don't want to, but if you do, you'll have those impounds to pay as well.

[renriq02]

BofA - it's funny how some say 'you dont have to take the points'.
I put in an inquiry recently with them, and my premier client mgr said that the discount points aren't optional. The rate is higher than normal, and this is how they cover their fees. This is a good program if you have at least 5% down, have a 680 middle credit score, and dont mind a higher rate.

1. Brokers work with a lot of wholesalers that dont have a retail division.
TBW is a widely known lender througout the mortgage wholesale business.
They have one of the best rates for FHA, VA, Conventional, ARMs, etc.

2. If your loan is declined, you will need to start the loan process AGAIN with another lender. With a broker they can submit your loan with various lenders OR they will know which lender to submit it with.

3. According to an intensive study by Georgetown University professor Dr. Gregory Elliehausen of over 500,000 mortgages - pricing by MORTGAGE BROKERS was less than pricing by DIRECT LENDERS. "The study found the APR (annual percentage rate) on broker-originated first mortgages were 1.13 percentage points less thanloans originated by lenders, and 1.98 percentage points loweron second mortgages."

4. Brokers can work on the fees/rates because this is how they get paid. Most banks will not budge on their fees/rates.

5. Most banks take 30days to complete a mortgage transaction. Brokers can have your loan done as little as 7days.


I will STILL shop around with ANOTHER broker.
I remember on 60minutes that they showed that SERVICES offered by realtors are typically higher than normal. It's good to shop around for the loan AND the attorney/title company.

The realtor normally sends her business to someone they know so that the loan will close. Be careful with the 'affiliate lenders'.
For example, ABC realty sends you to ABC mortgage services.
Nowadays, they wont have the same name. They would still need to disclose this to you in a business affiliation agreement.

[DanielChang]

Originally Posted by SamNC

what do mtg brokers actually do? Do they just serve as a clearinghouse and can give you a loan with banks they do business with? any benefits of doing business with a broker?

My agent wants me to go through a broker, but it is VERY obvious to me that she is looking out for her own interests and just wants a sale, so I am taking what she has to say with a grain of salt!

Most brokers do business with several lenders and have a wider portfolio of loan products to offer. They also may be more flexible in terms of fees (that is, that some of the fees are negotiable) since it's just coming from their bottom line. LO that work at banks may not have as many products to offer. You may be able to get a better rate by shopping around.

I am confused about your relationship with your agent, though. If she is simply looking out for her own interests, why are you using her to handle your transaction? A real estate transaction is a big deal and if she's simply looking out for herself, how do you know she is offering you the best representation possible?

[vukinjo]

Originally Posted by renriq02

BofA - it's funny how some say 'you dont have to take the points'.
I put in an inquiry recently with them, and my premier client mgr said that the discount points aren't optional. The rate is higher than normal, and this is how they cover their fees. This is a good program if you have at least 5% down, have a 680 middle credit score, and dont mind a higher rate.

Not sure what you mean by "premier client mgr" but I did note when I went through one of their branch mortgage reps, she was quoting higher points. When I went direct through the web/800# there wasn't the premium. They publish the rate on the site w/ points but you can see other options without as well. Obviously the rate is a bit higher if you don't pay the points.

[renriq02]

premier client mgr are given to bofa's customers that have large assets, and large loans with them.

I dont like it when a lender says NO LENDER FEES, and yet they sell you the discount points. Ask the bank what the YSP is on the loan, and you will see more than just the discount points.

[vukinjo]

Well, a title like "Bank of America's No App fee, No Appraisal Fee, No Credit Check Fee..." would be much tougher to market. You CAN get a rate without points OR you can pay the roughly 1 point for the lower rate. It is not the same as the other fees and costs. It seems all the brokers are attacking the name saying there's no such thing as "No Fee". That doesn't mean its not a solid program. I've said before, its not for everyone and its not the best deal 100% of the time. It IS worth looking at to compare to other loans though.

[judithexit]

Originally Posted by SamNC

what do mtg brokers actually do? Do they just serve as a clearinghouse and can give you a loan with banks they do business with? any benefits of doing business with a broker?

My agent wants me to go through a broker, but it is VERY obvious to me that she is looking out for her own interests and just wants a sale, so I am taking what she has to say with a grain of salt!

I see your point I will tell you as and agent and a loan officer that some agent get a point to bring in the loan.
I hate that because is not in right it is wrong that they do that . They should tell you three differnt ones that is the way they are trained.
get another opnion.

[renriq02]

I used to work for BofA, and I have seen the backdoor fibs.

I have stated in other posts that it is a great program with 5% down, and a 680 minimum score.

I have asked BofA if the borrower can close w/out the points.
Good luck finding a loan applicant who does.

There are a lot of lenders who dont charge app fee or credit report fee.
Appraisal being waived is also common, but I dont like it when a lender says NO POINTS NO FEE...and yet they sway you to TAKE the points.
From what I have heard .... the borrower needs to take the points.

Originally Posted by vukinjo

Well, a title like "Bank of America's No App fee, No Appraisal Fee, No Credit Check Fee..." would be much tougher to market. You CAN get a rate without points OR you can pay the roughly 1 point for the lower rate. It is not the same as the other fees and costs. It seems all the brokers are attacking the name saying there's no such thing as "No Fee". That doesn't mean its not a solid program. I've said before, its not for everyone and its not the best deal 100% of the time. It IS worth looking at to compare to other loans though.

[vukinjo]

Originally Posted by renriq02

I used to work for BofA, and I have seen the backdoor fibs.

I have stated in other posts that it is a great program with 5% down, and a 680 minimum score.

I have asked BofA if the borrower can close w/out the points.
Good luck finding a loan applicant who does.

There are a lot of lenders who dont charge app fee or credit report fee.
Appraisal being waived is also common, but I dont like it when a lender says NO POINTS NO FEE...and yet they sway you to TAKE the points.
From what I have heard .... the borrower needs to take the points.

Nowhere do they say "NO POINTS NO FEE" for starters.

I read time and time again brokers bashing the program trying to find the "fine print" etc . No one, not even the lender claims this program is for everyone or that it can't be beat. But it bugs me when people post to stay away or that it isn't what it claims to be, urging buyers not to even look at it.

To me, it is just another loan to look at and compare to others. Looking today on their site for my state, they show 3 options for a 30yr fixed. A rate with .811 points, a rate with .142 points and a rate with -.856 points. The buyer is able to choose any of those. I prefer the lower rate with the .811 points. In the long run, it makes the most sense. The points are deductible as well. If you want to have the higher rate, go for it.

In my experience no other lender or broker could offer a product that paid or waived the third party/title fees as well as the lender fees. And more so, its the overall benefit that is appealing, the no PMI for 5% down and the escrow not being required. All the benefits together far outweigh the points.