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Mortgage Broker vs Direct Lender

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madcap3693
Valued Member

Mortgage Broker vs Direct Lender

Hi All,

 

Right now I am planning on getting pre-approvals for our first home purchase at a big online lender, a traditional brick and mortar bank and two local mortgage lending companies.  The four above have indicated that they don't see much of an issue getting us preapproved for the amount we are looking for at a somewhat reasonable monthly payment.

 

Just wondering if fellow my ficoer's would recommend we get in touch with a mortgage broker as well?  Are direct lenders the preferred option since I should be able to get approved?  Is four pre-approvals enough to know that I have done my due diligence to find a good rate / terms?

 

Some general info about our circumstances are below.

 

My mid Fico 5,4,2 is 789 and my wifes is 700.  Wife has a few late payments but no bankruptcy or collections etc from 1.5 years ago. We've got around 15-20% down payment plus closing costs saved.  Just student loans payments between us totalling $850 a month.  No CC debt, auto loan or anything else.

 

 



Total Revolving Credit Limit: $224,710
AAoA: 8 Years 5 Months
AoOA: 19 Years 11 Months
AoYA: 0 Months

FICO SCORE 8


Message 1 of 4
3 REPLIES 3
SeaProbe
Regular Contributor

Re: Mortgage Broker vs Direct Lender


@madcap3693 wrote:

Hi All,

 

Right now I am planning on getting pre-approvals for our first home purchase at a big online lender, a traditional brick and mortar bank and two local mortgage lending companies.  The four above have indicated that they don't see much of an issue getting us preapproved for the amount we are looking for at a somewhat reasonable monthly payment.

 

Just wondering if fellow my ficoer's would recommend we get in touch with a mortgage broker as well?  Are direct lenders the preferred option since I should be able to get approved?  Is four pre-approvals enough to know that I have done my due diligence to find a good rate / terms?


I've done both, including with refi. My experience was better with a broker; they are in effect shopping your mortgage for you to get the best rate. That may or may not be the case for you, so best to check out all of your options if you have the time.

 

One DP from my CU. They don't actually write the mortgage, and so in effect acted as a broker. If you are a member of a local CU, it couldn't hurt to speak with them. In the end I used the CU a few years later for a HELOC, but not for the refi.

Message 2 of 4
LakeLife
Established Contributor

Re: Mortgage Broker vs Direct Lender

I've done both, and it depends on the broker.  In the late 90's I had a shady broker that instead of steering me towards a VA loan talked me into a conventional with a 2nd mortgage for the down payment.  The 2nd mortgage had an adjustable rate which was already high.  Back in those days, I was mortgage illiterate and was taken advantage of by this broker no doubt.  

 

I now know the ins and outs of mortgage loans and prefer to shop direct lenders myself and find the best situation for me.  




Message 3 of 4
Caught750
Valued Contributor

Re: Mortgage Broker vs Direct Lender

I'd ALWAYS go broker.  That's just me though.  Nothing wrong with a broker, a CU, and a direct lender.

 

Large brokers can get rate sheets that save you a bit on interest just because of their size and volume.  Brokers will shop it for you.  Brokers can have incentives from a lender (no underwriting fee) or so many Basis Points that can be given (1 discount point is 1% of the loan amount or 100 bps).  Brokers can often close far quicker as well (10 business days or so).

 

Direct Lenders could have an advantage to you though.

 

CUs can be stricter and more risk averse but they can have phenomenal interest rates too.

PERSONAL; Amex | AOD FCU | BBVA | BECU | Capital 1 | Chase | Citi | Discover | Key | NFCU | PSECU | SECU MD | Synchrony | US Bank
BUSINESS; Amex | Citi
F8 Current F8s ~750 Best Ever F8s ~775
TOTAL PERSONAL CL > $350k and TCL > $365k
Message 4 of 4
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