Mortgage Broker or Bank Direct? (loan officer, interest rate, credit, fees)

[TheLists09]

We're currently preparing to sell our condo and buy a home. When we bought the condo, we dealt directly with a loan officer at the bank and that worked out pretty well with no surprises. Through a contact, we've been in touch with a mortgage broker, who has been helpful but they're always helpful before you sign something.

My father, who has now bought 2 homes, has had bad experiences with mortgage brokers both times so I'm skittish. I don't want to show up at a closing and my interest rate has jumped a percentage point or have to come up with thousands of extra dollars (both things happened to my father).

Our credit is excellent so we won't need any help in that area. Any advice, personal experiences, etc?

[long101]

Iam buying my first home at the moment and working with a broker. I'm about 2 weeks away from closing and have locked in my rate. Overall I am happy with my choice, havent seen any surprises as of yet. The rate I locked in was less then we were estimating through the process. I'm sure I could have dropped .20 off the rate if I would have done a bunch of shopping, but this guy has made it pretty painless up to this point.

[Debsi]

The brokers will tell you that you should never use a bank.

I don't feel there is a simple answer to your question because there are too many variables. There are good loan officers and bad in both parts of the industry. A broker can really shine if you are a "difficult" loan - i.e. creative underwriting is needed because of the way your income shows on your tax return, etc. On the other hand, if there is a good local mortgage bank that does their own underwriting, it could go just as well or better.

I'd ask some trusted friends and family members who they used and if they were happy with their transaction, and go with one of their recommendations.

[chet everett]

The honest mortgage brokers will spell out why it is in your interest to evaluate all potential loan origination avenues. Some banks are owned by mortgage companies and those can be excellent route to a fair mortgage but too many banks see mortgages as a way to get quick profits with little risk, you should know that a HUGE percentage of all loans, regardless of what sort of origination took place, are sold to the "government sponsored entities" ( Fannie Mae & Freddie Mac) so rates are not materially different. What is different is the SERVICE you get and in my experience the good mortgage brokers understand that they MUST come through on time and with promissed rates or they will fail. In contrast bank employees often fail to explain the key ideas like what documentation is ABSOLUTELY required, how much lead time is needed and the various options on a rate lock.mto make matters worse the "coast to coast" type mega banks basically run all their underwriters out of giant telephone centers, treat the physical bank employees as fungible items in a giant marketing machine, have no committment to putting one person in charge of each loan and can lead to massive problems. Some "credit unions" are excellent, but others are plagued by the same issues as "mega banks" becuae they outsource a lot of their "back office " operations to cooperative lending service centers...

Bottom line is you need to go with REFERALS of people that have done a good job for those you trust. Even then firms / personnel change and if the person you meet with does not impress you with their integrity and trustworthiness , FIND ANOTHER.

Btw I cannot imagine how a person with any competent lender, regardless of type, could get to closing with surprise rates and fees. The sorts of documentation required is very standard and, assuming there were no special delays / extensions, there is no excuse for the buyer to be other than fully informed well before closing...