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My husband and I are shopping for our first home. Our buyer's agent had a mortgage broker call us to verify we were pre-qualified for a mortgage before he even talked to us. We qualified, have good credit, etc. The broker gave us a good faith estimate for a house we were interested in, and has answered any questions we've asked. We were told we should shop around for a lender, though, and so we checked with our own bank. We've had them for years and are always happy with their customer service. Our bank offered the same fixed rate and slightly lower closing costs.
We want to go with our bank. The broker is very nice, but we did not sign any contracts with him. He has spent about 3 hours with us in person or on the phone. He calls frequently to check on how we're coming along with finding a house. Our realtor prefers him and keeps telling us we should go talk to him. I don't want to do that. We did not sign any contracts with the broker. We haven't even fully decided on a house yet. We do appreciate the lender's business, but we are just more comfortable sticking with our bank.
Is there any reason I should stick with the broker - our realtor's preferred lender?
Exciting looking for your first home. We closed on our home in November and couldnt be happier.
Hrm, are you sure you got a GFE (Good Faith Estimate) already from the broker? It seems premature if he was just running some quick numbers. Did you give your SS# to him?
No reason to stick with the broker. Just tell your RE agent that you are far more comfortable with your bank and that you are taking your own route but appreciate the gesture.
You can even tell this to the broker guy that you are more comfortable with your own due diligence. This is his profession, nothing personal. This is also about what you are comfortable with, not him. If he is a pro, then you both should part ways amicably.
If he pushes, then let him know about it and that you were going to refer him to friends but just threw that out the window. But that is only a worse case scenario. Most of these guys work on referrals anyway.
There is a chance that the broker might try and wooo you with some cash offer "from the lender!" or some fuzzy math incentive. Dont buy it! Its all BS. If they really wanted your business from the start, they should have been more up front in the beginning. Buying a house isnt like going to a swap meet and haggling for someone garage sale item,
Thanks for the quick response and congrats on your new home! Yes, we gave him our SS#'s, proof of income, checking account statements for two months, and copies of tax returns for two years. He gave us an itemized fee worksheet for a foreclosure we were considering, but decided to withdraw the offer due to too many potential problems. We are totally new and overwhelmed. Between the realtor and broker, we realized we didn't ask for copies of anything we signed. We called the broker the next day to request copies of the things we signed, and he explicitly stated we didn't sign anything for him. He's really nice and informative, just not from our bank.
While I disagree with quite a few points from shmoov_groovzsd I will say that there is NO upside to any honest agent recommending other than the most professional mortgage source they have come across, especially as so many bad lenders have gone bust and really left real estate agents with out any good people to recommend.
Given that rates have been on pretty remarkable downward trajectory over past few weeks I would be extremely surprised if the broker you talked too does not have better rates than they did in even early June. You ought to have a new quote delivered.
The odds of any bank having problems / changes that mess up closing are the Number One reason good honest mortgage brokers are prized by honest real estate agents -- makes things work smoother.
Similarly there are legitimate ways for a broker that has multiple lenders they deal with shave down closing costs and fees -- something as simple as literally combining the delivery of the voluminous documentation packages into a single shipment can shave a bit off for high volume offices. The good honest broker will not make a quote that they cannot deliver on! There is no fuzzy math involved -- hiring one courier to deliver five sets of info costs the same as hiring the same courier to deliver one set of info, but if the five deals can share in the savings...
Really don't understand what sort of "due diligence" it is to talk with any bank that you have done prior business with if this is a FIRST TIME HOME BUYER -- I mean not even the smallest bank in America will have the same tellers and clerks that might greet you when you walk into a branch or answer your phone questions about a checking account work on your mortgage. Every bank of any scale has a telephone based lending operations center that really has little relation to the rest of their operations. Even the "mortgage specialist" that works out of local branch has probably done little more than take essentially a few minutes to watch an in-house verrion of You Tube explain how to get customers to fill out paper work to process a loan application...
It is very true that all mortgage brokers would die without referrals and they will put in long hours before during and after the sale to ensure that you are well served in a legitimate effort to stay first on your list if you should shop again OR need / want to refi OR ESPECIALLY for you to recommend their services to friends / relatives / neighbors. Your local bank can try and pitch you on whatever "promotion of the month" that they blast to every other customer.
Thanks! It sounds like you are great credit risks to a lender.
I agree with a lot of what Chet said regarding brokers vs direct lending houses. However, based on what you wrote, which was bailing on the broker, I replied and gave my $.02 on how to handle NOT using him.
It seems you had made your mind up already and just needed some reassurance on how to handle it.
chet,
Yes you are right about the logistics, but I wasnt giving advice on that. I was giving advice on how to brush the guy off kindly without getting pushed into a situation that made her feel uncomfortable. There is no more of an advantage using a preferred lender vs doing you own due diligence especially with a GFE in hand.
As far as due diligence, there are plenty of online resources like bankrate.com and some others that basically do the same thing a broker would. Which is taking the buyers info and basically knocking on doors to see who has the best rates etc.
You can even go on to trulia and have any broker beg for your business especially considering some of the leg work has been done already.
At this point its so competetive for a great credit risk like jensshoes that the difference in rates and fees almost cancel each other out from one lender to another.
Last edited by shmoov_groovzsd; 06-29-2011 at 06:54 PM..
By all means, if you don't want to continue with the broker let him know. Don't continue to waste his time thinking you're a client. I had a client working with 3 brokers, which is OK to get estimates, but she didn't let the 2 she didn't choose know and it caused a lot of heartburn later.
We're closing on a new house soon and we actively talked with 2 brokers/lenders. One was recommended by our real estate agent and one was from my local credit union. Both were really helpful and I think I told both that we were talking with another broker (to comparison shop). Both did credit pulls and such but we decided on one before we started making any offers on houses. We ended up with the broker our agent suggested. There were a couple reasons why but one was that our agent suggested him and I believe our agent would not suggest any broker who hadn't proved himself able to get things done. Our agent never pushed him on us though. I'd be a little miffed if I felt my agent was doing that.
So, use your bank if you want to. I don't think there is any breach of ethics or protocol for seeing what both of them can offer you.
My husband and I are shopping for our first home. Our buyer's agent had a mortgage broker call us to verify we were pre-qualified for a mortgage before he even talked to us. We qualified, have good credit, etc. The broker gave us a good faith estimate for a house we were interested in, and has answered any questions we've asked. We were told we should shop around for a lender, though, and so we checked with our own bank. We've had them for years and are always happy with their customer service. Our bank offered the same fixed rate and slightly lower closing costs.
We want to go with our bank. The broker is very nice, but we did not sign any contracts with him. He has spent about 3 hours with us in person or on the phone. He calls frequently to check on how we're coming along with finding a house. Our realtor prefers him and keeps telling us we should go talk to him. I don't want to do that. We did not sign any contracts with the broker. We haven't even fully decided on a house yet. We do appreciate the lender's business, but we are just more comfortable sticking with our bank.
Is there any reason I should stick with the broker - our realtor's preferred lender?
I am also a Realtor. While I always recommend my clients shop for
a lender, I don't believe I should steer them towards any lender in particular. It has always seemed to me, that my clients comfort with
a lender of their choice is important. While I hope to keep my clients
chances are that we won't be in much contact, however as a buyer could
be doing business with the lender every month for the next
30 years. I've always been very clear that my job is real estate, and
the lenders job is the loan. And it's always the clients choice.
good Luck!
Last edited by susan.webster; 06-30-2011 at 10:54 AM..
Reason: typo
It's 100% about comfort level. What strikes me as slimy (yes, professional mortgage term) is when someone has decided to go with their bank, but when they can't reach someone after hours, they call the broker for the letter (because they really want the house).........then still go with the bank.
Thanks everyone for your advice and information. Yes, I needed reassurance that it was OK to bail on the broker when my RE agent didn't think so, and also to understand why my RE agent was insisting that we use the broker. I was starting to not feel good about my RE agent at all, and really needed disinterested third party opinions.
We promptly told the broker that we would not be using his services as per NinaN and SmartMoney's advice. He was so super nice about it, I felt awful. I wish he could handle my loan with a lender I can trust. Maurene and Susan, it's good to hear that people feel they can trust their agent, and if they don't do exactly as their agent says, the agent won't get jerky about it.
Schmoov and Chet, you're both right. There are other lenders who offered .1-.3% lower rates than my bank with amazingly low closing costs. My RE agent was also confident the broker could offer a lower rate and closing costs. The problem is the broker's bank was in the news recently for being financially unstable and settling a multi-million predatory lending lawsuit. I'm not a real estate or mortgage professional, I don't want any mortgage brokers to die - especially this one, but the words "financially unstable" and "predatory lending" sound really, really bad to me. Lenders decide who to loan money to based on their credibility, reliability, income, assets, and criminal backgrounds, right? If a lending institution won't loan a mortgage to someone with a record of being financially or criminally irresponsible, shouldn't mortgage shoppers practice the same precaution?
Finding a lender who will approve a VA loan and making an offer on the foreclosure turned out to be ridiculously easy. Choosing a lender and RE agent is turning out to be so much harder than I expected. At this point, I'm tired of googling for complaints on various lenders for hours every night to figure which ones are financially stable, haven't been charged with predatory lending, and don't have an incompetent loan processing department. Even my bank's mortgage department had several complaints. Not nearly as many as the big lenders, but, still, customers did complain about the loan processing department for all kinds of valid reasons, and the credit union our friends and family recommended had similar complaints. None of our friends had the problems that our online searches came up with, but I don't want to be surprised, either.
If all these lenders, including my very awesome, conservative lending, non-predatory lending bank, all have a ton of angry customers... How the heck do mortgage payers manage to get and keep their mortgages without losing their minds, money, and/or firstborn child? Or is the entire 21st century mortgage lending industry so jacked up that it's best just to buy a plot of land and live in a yurt until we can afford to build with cash? (Not that that's a serious option, I'm just really disgusted at this point.)
Are there publications or websites like college ranking publications that provide basic statistics and information about various lenders, like what percentage of mortgage loans close on time after pre-approval, financial stability, and number of complaints per year for each department compared to number of clients and holdings?
Most of all, am I making mountains out of mole hills and just being too chicken to buy a house and need to save more money to pay an attorney to hold our hands every step of the way?
Sorry for the zillion questions everyone. Thanks again for all the advice and guidance. The more informed we are before we commit to the biggest investment/financial risk of our lives, the better.
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