Mortgage Broker or Lender direct?

I went through a broker, they offered nothing except that they will collect a 1.75% fee. Go direct. Check out regional banks like Valley National and Astoria Federal. Their rates were about 1/8 - 1/4 cheaper than larger banks.

Direct. I went direct and got great rates.

There is no "right" answer. One will not always provide better rate than the other. I've done both in the past. Nothing remarkable about either experience. Most recently I used a broker who made my refi extremely easy. I find the process of shopping around to be thoroughly unenjoyable so I appreciated that I didn't have to do anything but fill out forms with the broker and show up at a closing.

It depends. If everything is in order and you don't need to do any explaining, I would say a bank. If not, go with a broker who can shop your loan around

I agree it is best to get a quote from a bank (maybe where you have an account) as well as a mortgage broker. Up until very recently I can say that none of my clients had any problems obtaining financing other than the usual information/documentation required.

On two current deals the banks are asking for some documentation that two separate managing agents are telling us they don't/won't provide. Chase needs a board member/building agent to sign off on one document. Astoria savings wants a copy of the proposed 2012 building budget (not financials).

Another factor can be the building you are purchasing in, there are new standards for condos regarding reserves. There are also some buildings that certain banks have not approved yet (this can happen in new construction, but also in older buildings as well such as Park West Village).

I just recently applied for a mortgage and it was hell, being self employed did not make it any easier. I was turned down by a lender and then literally a few days later re-applied with a different mortgage broker who had me supply some additional information and I was approved? Go figure. I have no debt/802 score, but being self-employed was the kicker (and in RE).

Keith Burkhardt
The Burkhardt Group

I think it depends. If you have a plain vanilla Fannie loan you can walk into a local branch of a couple of banks and get quotes.

If your scenario has any hair on it or a Jumbo I would speak to Steve as mentioned above as well as a community bank, or in our case a private bank that understand the local market and clients. Some banks will offer relationship pricing that will deeply discount your loan with deposits. If you are buying a coop make sure the person you are speaking (bank or broker) knows that market.

Mitchell
mcohen@firstrepublic.com

Try both. But when it comes down to condos and coops, you want to make sure the lender has some familiarity with the specific building you may be interested in. A certain lender may be able to offer a better rate but if they cant lend in that specific building, that rate doesnt mean anything. sunny.hong@bankofamerica.com

One thing to keep in mind here is that there is a middleman either way. If you go through a broker, the broker is dealing with a wholesale lending desk at the bank. If you go through a bank branch, you again are dealing with the bank's retail arm which again intermediates between you and the wholesale lending desk. In either case, you're paying the cost of the retail end of the transaction. There is no free lunch and you do not ever have access to the true wholesale rate.

Best strategy is to try both and go with the route that involves the least cost. One approach is to ask all lenders for a loan at a certain interest rate, and ask how much the total all-inclusive up front cost would be (including points) to get that rate. Then lock with whoever is lowest.

Oh, as an aside, our loan was conforming, and we found huge variation in cost, particularly among the banks. The broker we used ended up placing our loan at the bank we happened to already use for our daily business, at a much better level than they had offered us directly.