Mortgage brokers - necessary?

[Anonymous]

My husband and I are getting ready to purchase our first home. Excellent credit, 120K combined income, little debt, about 10% downpayment. Is a mortgage broker necessary? He said his fee is about $1300 and he doesn't get paid until the end. I've done some research and it seems relatively easy to find a mortgage online, with details of all the fees, etc. Are there specific questions to ask a mortgage broker to uncover any hidden fees? Many thanks!

[Lel]

We used a mortgage broker to purchase our house, and in the end, I wonder if it was really necessary. Yes, it was nice that he was supposedly able to look at interest rates from multiple banks, and our credit was only pulled once and used to obtain rates from multiple lenders. When it came time to submit our offer (against 9 other competing offers), our mortgage broker wrote a strong pre-approval letter confirming our assets and income. At the time, letters like this were considered absolutely essential for a successful offer to purchase.

We paid a nominal application fee, as I recall, but we didn't pay a commission to the broker. The commission was paid by the bank (Bank of America, in this case) outside closing - that is, B of A paid the broker but the cost wasn't directly passed on to us.

I used "directly" in the previous paragraph for a reason. I suspect that even though B of A paid the broker for his services, the cost was passed on to us in the form of a slightly higher interest rate.

In addition to this, our mortgage broker had a number of additional fees that added to the cost of the loan. Things like "document preparation fee" and "notary fee" and stuff like that. It wasn't until after we closed that we learned that these fees are just padding and can be negotiated away.

If you have the time to go to several different banks, then you probably would save money on your loan and fees. You'll have your credit report pulled several times, but it will only count as one inquiry hit as long as all the inquiries fall within a certain period of time (I think it's two weeks, but it might be a month).

[LuvsRetro]

Try Pentagon Federal Credit Union first.  They are so awesome.  They are having some great promos right now on all of their mortgage programs.  Very low rates.  Very easy to work with.  I know of several people that are very happy with them.   They have special online apply rates all the time.

[pattycake]

I had a referral for a broker, but I didn't use him. I ended up using my state employee credit union and had a smooth, easy experience. I think I spent about 10 minutes filling out the application, signed some disclosure papers, and that is it. I close on Tuesday, 4/15/08, but sign all my final documents on Friday. Closing costs were super cheap (although seller paid them), so I am glad I just went straight to them.

I had to pay a $50 application fee, and of course they charge the origination fee of 1%, but their costs were much lower, as was their interest rate, than anything else I looked at.

Try a credit union - their process is quick and the paperwork is simple, and the service is very good.

[Anonymous]

I haven't used a broker in my last 3 purchases.

Gotta be careful and REALLY do your research on the loan products out there, but in the end you'll save yourself some INQ's, some $$$, and some major letdowns

[Lel]

I just looked at my closing documents from a couple years ago and I'm even more irritated by all the nonsense fees tacked on to the closing costs.

I'm looking to refinance my jumbo ARM if the jumbo rates actually come down, and if I do, I'm going to try to avoid using a broker.