Borrowing from mortage brokers

[Maximus96]

We're looking to refi our current BofA loan with a 6.25% rate. The lowest rate I found was 4.625 with 5400 in fees. This rate is thru a broker and is lower with less fees compared to Countrywide for example. Are there any fears or things to watch out for when going thru a broker instead of a direct lender?

 

[alkemyst]

Originally posted by: Maximus96
We're looking to refi our current BofA loan with a 6.25% rate. The lowest rate I found was 4.625 with 5400 in fees. This rate is thru a broker and is lower with less fees compared to Countrywide for example. Are there any fears or things to watch out for when going thru a broker instead of a direct lender?

a few...having things not change when you go to close, then having him answer his phone.

Without knowing the principal or type of property/situation it's hard to say what you are getting esp. if not locked.

In general I don't see too many brokers actually beating a lender head to head.

 

[Maximus96]

in my situation, for a 30 year fixed, $417k loan, Union Federal Mortgage Inc is offering me 4.625% with $5400 out of pocket fees. Countrywide offers me 4.75% with $8100 in points/fees. most other big lenders like Bank of America is up in the 5.xx% range plus point/fees. So this broker has the best rates so far.

 

[IceBergSLiM]

1) A BROKER CAN'T LEND MONEY THEY AREN'T A BANK.

2) THE BROKERS ARE PAID BY THE BANKS THEY ARE NOT PAID BY YOU.

 

[Maximus96]

Originally posted by: IcebergSlim
1) A BROKER CAN'T LEND MONEY THEY AREN'T A BANK.

2) THE BROKERS ARE PAID BY THE BANKS THEY ARE NOT PAID BY YOU.

Besides the two very obvious points that you pointed out with much enthusiasm, what other signs should i watch out for?

 

[Mxylplyx]

At 5400 in fees, I am assuming that you are buying down the rate with points. Dont use the rate alone to compare. Many brokers will slip in interest buydowns in order to make it appear they have the lowest rate. If it is a house you plan on staying in a long time, that isnt necessarily bad, but just be aware of it. Be prepared to walk away if they spring a surprise fee right at the last moment. They will often do this, and people will often swallow it because they are close to signing, especially if they can just absorb it into the principal. Of course watch out for obvious things, like adjustable rates, or balloon payments on 2nd mortgages.

 

[OCGuy]

Originally posted by: IcebergSlim
1) A BROKER CAN'T LEND MONEY THEY AREN'T A BANK.

2) THE BROKERS ARE PAID BY THE BANKS THEY ARE NOT PAID BY YOU.

1) The term "broker" clears that up

2) False - They can get paid by both

 

[D1gger]

I tried to arrange a mortgage once through a broker and it was a disaster.

After giving him 6 weeks to complete the deal, and providing every scrap of paperwork and documentation that he asked for. After we had repeated asked him if everything was OK and there would be no problem with the closing and being re-assured that everything was in order and with less than 3 days to closing he came back with a list of three items that he needed to complete the transaction that he had never requested before.

We simply could not get the three items in time for the closing and the date could not be changed.

Luckily, I was able to quickly arrange for some unsecured bridge financing myself and then after closing I went directly to a bank and arranged a conventional mortgage (without being asked for the three items that the broker asked for at the last minute) and paid off the bridge financing.

I have not used a mortgage broker since.

 

[richardycc]

I refied my BoA mortgage with BoA 2 months ago, BoA refi is very straight forward, they only charge 2 fees, which I now forgot exactly they were, but one was $400 and the other one was $700, and they paid the rest like home appraisal, etc.
go talk to the bank directly, no need to go thru a broker.

I think one was application fee and the other one was loan origination fee.