Comments on: experience with mortgage brokers

Question: experience with mortgage brokers

hazyspring — Thu, 04 Jan 2007 10:57:34 -0800

Does anyone have any experience with Mortgage Brokers that are co-owned by real estate agencies?

My realtor has recommended a broker who works for a company that is co-owned by the agency she works for. I am shopping around with other people, but I am wondering, what is the deal here?

It seems like there must be a major conflict of interest with this and some way they are ripping you off. Does anyone have any experience with something like this?

I am pretty early in the home buying process, and am definitely going to crunch the numbers that I get, but I'm not there exactly yet.

By: jerseygirl

jerseygirl — Thu, 04 Jan 2007 11:17:00 -0800

Definitely seek out your own mortgage company, your own home inspector, everything. Let your realtor be an entirely individual entity with no connection to anyone else. I wish I had.

bankrate.com can be of assistance to you in finding someone, as will your local bank.

By: COD

COD — Thu, 04 Jan 2007 11:33:29 -0800

The best way to find a mortgage broker is a referral from someone you trust. Ask your home owner friends and coworkers.

The affiliated broker is not necessarily ripping you off - so don't write him off completely. However, definitely check your other options.

My experience with bank mortgage departments it that they tend to be significantly more expensive. That may vary with where you are though.

By: fixedgear

fixedgear — Thu, 04 Jan 2007 11:45:43 -0800

Yeah, what jerseygirl said. The only link we had was the title insurance company was part of the same firm as our realtor, but the rates for title searches were all the same. We got our mortgage from a mortagage broker that we ride bikes with, so we felt pretty comfortable. However, when we refinanced we went with Wachovia who had the sharpest rate. Shop around.

By: mosk

mosk — Thu, 04 Jan 2007 11:46:31 -0800

We used an independent MB when we purchased our first home 8 years ago, and again when we refinanced several years later. The first time it was a big help and it was worthwhile to pay someone, as it compensated for our inexperience. Using a MB for our refinance was, in retrospect, a mistake, and I think we could have done a lot better if we had gone a different route.

I don't think there is any harm per se in using a MB that is associated with the realtor, but you need to also talk to other MBs and non-MBs to get a good picture of your options. DO read the fine print and pay attention to the MANY, MANY hidden fees -- "document prep", "courier services", extra fees for photocopying, etc. There are so many places that fees can be hidden in this process that it is hard to build a direct apples-to-apples comparison, but one suggestion would be to build a spreadsheet or database with various fee categories, and make sure you either fill in the appropriate fee from the appropriate source or get confirmation that said fee does not apply from this MB or vendor.

By: caddis

caddis — Thu, 04 Jan 2007 11:56:59 -0800

Skip the mortgage broker. Just find your own lender.

By: answergrape

answergrape — Thu, 04 Jan 2007 12:58:25 -0800

If you belong to a credit union, consider talking to them. My credit union provides far fewer services, but it was a far better deal overall for mortgages.

By: dr_dank

dr_dank — Thu, 04 Jan 2007 14:33:18 -0800

jerseygirl:Definitely seek out your own mortgage company, your own home inspector, everything.

This is strong advice. My friend bought a house several years ago that got a clean bill of health from the home inspector (referred to him by the realtor). Somehow, he managed to miss not one, but SIX loose pipe joints that were causing the basement to smell of natural gas.

Too many of those operators are in the pockets of the realtors.