mortgage brokers vs direct lenders (real estate, insurance, credit)

[skapur]

Can anyone please explain some advantages and disadvantages of mortgage brokers? I heard the PMI will be more when dealing with mortgage broker and at the same time interest rate will be less. I'm planning to put down only 5%.

Also, are there any other lenders(like BoA) that give "no fee mortgage"?

[Spincycle]

If I were you I would avoid PMI and do a HELOC (aka 2nd mortgage).

try looking at Spencer Savings Bank and ING direct for mortgage products.

[Gdelemschl]

if one is willing to pay 30% downpayment on a house, I heard that there are some firms that lend at a rate much lower than the conventional 30-yr mortgage. One such firm used to advertise on Bloomberg in 2006 ... I don't recall the name now. Do any of you remember it or know any other real estate finance corporation, that provides a lower-rate for such low-risk type mortgage buyers?

[CuCullin]

I would not recommend a HELOC. I went with the BofA no fee mortgage, and its the right solution for me. You'll have to crunch some numbers, but the slightly higher rate from BofA (generally, the big lenders have a slightly higher rate) is still offset if you don't plan on living there forever. Run the numbers, see how long you would have to stay there that it would end up costing you more; for me, it was about 12 years. I will not be living here for 12 years, so no problem there.

Weichert had a similar program; I found the BofA mortgage the best option for me.

[NJ MTG Guy]

I am in the mortgage business and work for a licensed mortgage banker and wanted to give you some food for though. There aren't any lenders out there that will do a heloc to a 95% ltv. Most lenders wont go above a 90% ltv on a heloc. Your best bet would be to look for a conventional loan with pmi. PMI companies have also made it more difficult for borrowers to qualify fyi. If your unable to find the conventional loan then try to get an fha loan. On an FHA loan though, there is an upfront 1.5% mortgage insurance fee that goes on top of the loan amount plus the monthly payment. You wouldnt incur the upfront fee should you get the conventioanl loan. Hope that helps!

[NJ987654]

stick with direct lenders. It's like buying anything, you should know who you are working with. Reputation and service are important (it's the biggest purchase you make!). don't just go for the lowest rate. Get multiple quotes (FHA vs conv, 1 point vs 0 points, without fees or with fees, etc).

B of A no pmi is a pretty good loan but it requires 720+ credit (I think). Make sure you check the details. Rates are higher so it is not a good loan if you plan on being in the home for more than 5-7 years.

Schwab and Merrill both offer mortgages (they use a third party company to handle them) and their rates are awesome. You would have to compare paying fees and getting their rates versus paying a higher rate with no fees on B of A. See their web sites for details.

Good luck.

[Obrero]

Originally Posted by NJ987654

stick with direct lenders. It's like buying anything, you should know who you are working with. Reputation and service are important (it's the biggest purchase you make!). don't just go for the lowest rate. Get multiple quotes (FHA vs conv, 1 point vs 0 points, without fees or with fees, etc).


Good luck.

Nonsense. A sharp mortgage broker is worth his weight in gold.