Why use a mortgage broker?

[Anonymous]

So, I contacted a lender recently, who turned out to be a mortgage broker. The interest rate I was approved for seems high, and I have to pay a couple thousand dollars to the broker if I choose to use their offer. I am a special situation (I want a physician loan, which doesn't seem to exist anymore), so I can see why I might have to use this broker. But I don't understand why anyone would use a broker...

What are some situations that someone would use a mortgage broker for?  What are you paying them for?  Why not do legwork yourself and shop around?

[DallasLoanGuy]

Do the leg work yourself and go direct to the source.

Bring the GFE here and I will most likely tell you that you are getting a good deal. <= same deal a broker can give you BTW

If the rate/fees looks high, then maybe they are. But it isn't because you are using a broker.... it is because that loan officer was being greedy.

Brokers take WHOLESALE rates(not the retail rate you get by going direct) and they mark it up to retail rates and offer it to you.

post your gfe here along with some info about your situation and we can help you

[Anonymous]

I'll attempt to post the GFE. It's not the greatest looking scan. We can't do the loan anyway because of the 5/1 ARM, but it still seems like not so great of a deal.  I'll see what you guys think. 

[Anonymous]

and I guess i should post some info... I'm going into my medical residency, so I have a lot of student debt, not much in savings (but enough for closing costs), and haven't started my "job" yet.  So this loan is supposed to ignore my debt load and take into account that I will be working soon.

My credit is around 760, husband is 680.  We were looking for a 100% financing loan with no PMI. This type of loan existed last year, but apparently this is the only way I can get it this year. We've got a month or 2 to shop around, otherwise it looks like it will be renting for another 4 years. 

Message Edited by laurak on 03-26-2009 07:17 PM

[Anonymous]

In my case, the use of mortgage broker was pretty simple -- it was a private sale (no real estate listing, no agent/fees) from a colleague with whom I have a bond of trust, and the broker provided what both I -- the buyer -- and the seller lacked in expertise: a legal and suitable contract template, wide lender access, and closing facilities.

The result was equally simple -- I/we paid in closing costs several thousand dollars less than what it would have cost the seller in agent fees alone. And, I/we would have paid at least some closing fees anyway. (Some of the savings was passed on to me, of course.)

I may not have made the best, rock-bottom deal I could have made, but I have little doubt I did better than I would have done buying a house listed with a real-estate broker.

Granted, mine was a somewhat unique situation -- but one I'm sure is not unprecedented, either now or in the future.