a Broker or a Lender?

Michel35 · Joined: 05 Nov 2007 Posts: 4

Finding a suitable mortgage is the crucial point in the process of purchasing real estate , because the terms of the mortgage actually determine what home you will be able to afford and how large your monthly payments will be. A house may be the largest and most important purchase in your life, and that’s why you should check a lot of different mortgage options available and find the one that will allow you to save as much money as possible.

If you want more options, it would be wiser to work with a mortgage broker, because the broker’s work is to provide you with a lot of different options to choose from and help you pick the one that suits you most. A mortgage broker will do all the necessary research, gather all necessary information on the basis of your requirements and compose a list of mortgage lenders potentially suitable for you and mortgage options offered by them that might meet your particular financial needs. The choice then will be completely up to you.

The main advantage here is that you don’t have to do all the research work yourself – it is done for you by dedicated professionals. So if you don’t know exactly what type of mortgage will be the best for you, it would probably be better for you to work with a mortgage broker to get the funds you need at the lowest possible rates and under the most advantageous conditions.

With a mortgage lender, on the contrary, you will usually get little choice, because most lenders have fixed mortgage options and rates, which they will not change to suit your particular needs. But if you know exactly what lender company you are willing to work with and are aware of the options this lender offers, then you might prefer to work directly with a mortgage lender.

uptight mortgage guy · Joined: 23 Nov 2007 Posts: 30 Location: WV

Throwing the bullcrap flag on that tired pitch. Brokers have their place in the market, not neccesarily from their "wide array" of programs.

Truth is, if you wanted to flex your muscle, it should be from your access to a few whole sale banks that still can offer cheaper rates.

Most of the larger banks ( the ones brokers claim they have access to ) have shut down there corrospondance and wholesale divisions giving brokers less to work with. So the programs they once had access to, they now have to run through much smaller banks if they had access to them at all.

Best advice, run your loan through several different sources, do your homework, look at your good faith estimates, and take your pick.

JasShapiro · Joined: 10 Nov 2007 Posts: 11 Location: El Dorado Hills, Ca

Quote: Most of the larger banks ( the ones brokers claim they have access to ) have shut down there corrospondance and wholesale divisions giving brokers less to work with. So the programs they once had access to, they now have to run through much smaller banks if they had access to them at all.

Do you think you might be slightly exaggerating? I'm pretty immersed in this segment of our industry and know of only a small percentage of banks that 'have shut down there corrospondance and wholesale divisions giving brokers less to work with'. Also, whether a bank 'portfolios' a loan product or not has much more to do with the programs offered as opposed to the size of the bank. It is nice to be a broker and have a gamut of options.

Quote: Best advice, run your loan through several different sources, do your homework, look at your good faith estimates, and take your pick.

And this is great advice. Why limit yourself to only brokers or bankers when shopping for your financing on such a huge investment? Do your homework, forget about the semantics and focus on the numbers.

My .02 cents with interest...

Jason Shapiro

uptight mortgage guy · Joined: 23 Nov 2007 Posts: 30 Location: WV

I am only speaking from experience in being a direct lender and being a broker. From my experience, brokers are largely shut down in available programs as compared to what they once had. To say they are not is a huge miscommunication to the customer, in my opinion.

A broker may or may not have the best assess to programs depending on the broker. Some are regional. Some can't even do FHA. And some are awesome.

But to say to a customer a broker relatioship is the only and best way to go in all circumstances is a misinformation campaign at it's worst. Small percentage? Not what http://ml-implode.com/ says. But heck, what do I know?

chow · Posted: Fri Nov 23, 2007 10:01 pm Post subject:

That "implode o meter" is a little one sided. I've found it to misr report, and not update.

Be careful what information you live by, because on the secondary market it is much easier to understand what is happening if you follow the levels above the implode website.

A good broker/ coorrespondent lender knows who's still doing what types of loans, and who they can fund through. Many times it' easier to go with a middle man know as a super broker (a broker who has a line of credit with funder who underwrites and has TPO authority) than going to the source for a loan here and there.

Grasshopper, if you really want to be an expert-who isn't one of the walking wounded from S&L crisis, and a Little "Asian Flu", you'll sit back and watch and learn.

It's easier than getting burned by the seat of your pants, like "your's truly" has been on the last 20 years.......

JasShapiro · Joined: 10 Nov 2007 Posts: 11 Location: El Dorado Hills, Ca

'uptight mortgage guy' There's some very good information on this site and a handful of industry professionals sharing very good, solid information. I found this site several months ago and have checked in from time to time to read voyeuristically but only recently joined. I think the original message in this thread was very misldeading and appeared to be from someone without a great depth of understanding or history in our chosen occupation. My intent, having been on both sides of the coin, is to just share the opinion that both banking and brokering can offer similar end results to the customer. Your reply was warranted but your opinion seems to be biased in the other direction. The true filter is the loan officer. Other than an extremely small amount of niche programs many brokers and bankers can offer the identical products. In the past I have placed BofA employees (loan officers included) in loans that were less than their 'employee discounted ' rates and fees and in one instance actually placed the loan with BofA! We continually beat CHL retail using their own products. Like Chow said, part of it is what is going on in the secondary market.

Products have disappeared accross the board. Many programs disappeared over night a few months ago and the investors have recoiled, some overreacting. In reality, greed drove the market on every level, from the consumer all the way to Wall St. and our government did nothing to regulate it.
The cycle we're in was very predictable. The market corrections were, and are, needed. Our industry will continue to lose more banks, brokerages, and products but eventually equillibrium will be reached and recovery will begin. And then when enough time has passed and enough people forget what can happen through irresponsible lending......

Sorry for the lengthy posts,
Jason Shapiro

uptight mortgage guy · Joined: 23 Nov 2007 Posts: 30 Location: WV

Jason, I can't think of anything on your post in which to disagree.

My comment was biased

#1 Because any broker that insinuates this is the same market with the same available programs is at best "fibbing a little wee bit"

#2 I tire of standing up for brokers as I do in almost every post just to read this blather about brokers being the only way to go.

I am sure you are successful due to your honest portrayal of the market and it's challenges across the board and I appreciate your post.

I know I'm not the only game on the block, I just tire of the brokers that misrepresent themselves as the cure all.

And CHOW, I find your comments slightly patronizing. If you can't admit to the decline in available programs for brokers, I truly have nothing to "sit back" and learn from the likes of you. I'm no rookie.

So again, I say. Check your local back, retail lender, broker, ect. Do your homework and choose the best fit for you Mr. or Ms. Consumer.

None of us has the best option for every customer every time.