Mortgage broker vs bank

I prefer to go direct. Otherwise just one more middleman with his hand out.

That said, "you" need to shop the banks.

There aren't any concrete advantages unless your situation is out of the norm. I've been both sides of the track and there is one clear reason why I work directly for the bank. I know my underwriters, I get to speak to them and reason with them. Most brokers ship a loan out and wait for a response not knowing who is looking at it and no one to reason with. But why not try both? Besides comparing fees and rates you should also see who you feel comfortable working with. Afterall, it can be a 30-90 day relationship. sunny.hong@bankofamerica.com

I'd actually say there are no concrete advantages going directly to a bank. Why work with just one bank and put all your eggs in one basket, when you can have access to all of them for no added cost?

Brokers don't add to the cost of a transaction whatsoever, they usually lower them. Rather than you calling a bank directly at the retail level, brokers work at the wholesale level and can offer the same bank's products at the same rates and fees. If you call Chase or Bank of America directly that employee you're speaking with has a certain cost to the bank: salary, benefits, assistants, office space, etc. Whereas brokers get paid only a commission for directing loans to particular banks, so they're given wholesale rates and will shop multiple banks at once for you.

As a consumer you just don't know which bank is currently offering the best rates so any bank you call would just be a random guess. You could spend hours calling banks directly yourself, or have your broker do it for you for free in a few minutes. As for underwriting, brokers have the very same direct access to, and long-standing relationships with, the underwriters at each bank so there's no difference there except that you wouldn't be beholden to anyone particular banks rigid underwriting policies. Bottom line: call both and decide for yourself.

From my personal experience, if you have an even slightly complicated situation (ours was that one of our parents is co-signing) then go through a broker, because they will help you find the right bank that will take the loan. When we tried to "shop around" at the banks we would not hear back for months without any reason why while our broker would be like "we need to do X, Y with your application for it to be approved".

Try both.

In our situation, the mortgage broker offered us a better rate with lower closing costs and seemed much more knowledgeable about small co-ops.