Mortgage broker fees....

Jonnyws,

All Mortgage brokers will tell you that they are standard fees but that is b/s. Negotiate all those fees, in fact lie to them and say you have another broker who is willing to waive them for your business. Right now these brokers are staring for business and are in no position to be charging such high fees. Refuse to pay them and try all your local and national banks too.

Go to no frill mortgage brokers for free service.

Manhattan Mortgage is generally fair. I think you can get better rates directly though if you shop a little bit and take advantage of ANY contacts you have personally, via family, or through work or friends to gain access to VIP groups within banks such as Wealth Management division or Private Banking group or whatever a particular bank calls it. These groups can get these charges waived often, split the cost of all or some of the points you buy, and offer preferred rates. If you don't have excellent credit forget it though.

my appraisal cost 450 and waived a 450 fee; total fees less than 750.

Every mortgage broker isn't doing this because it's fun -- they're doing it to make money.

Some make their money in fees ("front-end") and some make their money by charging you a margin over the rate they're getting from the bank ("back-end" -- also known as yield spread premium or YSP).

What should matter to you is not whether your broker's fees are competitive with someone else's, but whether their front-end plus back-end charges are.

ali r.
{downtown broker}

Well said Ali. Plus, $1000 for an appraisal on a 3mil prop is fair, on a 500k condo it's high.

You can probably get something knocked off of those fees, the broker isn't getting rich from them anyways. Keep in mind most banks also have those same fees, possibly just named differently.

What is a "no frills broker" inoeverything ?

A wise man once said, EVERYTHING in life is negotiable. As marco1313 says, mortgage brokers are scrambling for business, so they (and their managers) will often do what they have to to get your business. If you are a "prime" prospect, that will help (very good to excellent credit, decent loan amount, etc.)

As Ali R. says, mortgage brokers make their money by a combination of front end (what you pay) and back end (what the bank pays) fees. Exactly how they are compensated is less important than what the bottom line is to you.

Or even whether you need a mortgage broker, at all. When you use a broker, you pay an additional fee. Some people need or want that additional hand-holding, but others don't. And if the borrower has "issues", a good mortgage broker can be indispensable. In theory, the mortgage broker is often going to the same bank you are (e.g., Chase), but getting you a slightly better rate than you could get on your own. This, again in theory, compensates at least somewhat for the additional fees you'll be paying. And with the current turmoil in the system, I'm not sure how much of a price advantage the mortgage broker gets compared to what you would be getting directly. Another issue entirely is how much of that price advantage the broker is passing on to you.

And don't overlook reputation / customer service / misc policies. I have clients that once their mortgage broker / loan officer got their application fee, they could be next to impossible to reach by phone. Also, things like rate lock timeframes, rate lock fees, commitment expiration policies - these are the types of issues that can come up, so it's good to clarify lender policies up front.

well said johnrealestate1...I believe as time goes mortgage brokers will start to become almost obselete and it will just be the major banks that can hold ground. These banks will start taking less risks and definitely not any reputational risks such as as risky loan products.