Hey All! This might be a dumb question, but can someone help me understand what increased loan costs you’ll incur if using a mortgage broker vs getting a loan from a bank directly?
Hi @Bobby Bohren A bank also has mortgage brokers that work for the bank. I think the general theme here is trying to save on fees. If you are intending to invest in real estate for a long time I would advise trying to build a power team. I use the same agent, broker etc on all of my deals. They also bring me deals and add value in other ways over the years. I invest in relationships and look less at the small "savings" in the short term.
Also mortgage brokers that don't work for the bank only exist because they get you better rates and terms than the bank. If they didn't they would not exist. Hard and private money also happens outside of banks.
Invest in relationships
One of the biggest things with brokers is that you lose control of the process when you go under contract. When you go with a broker underwriting and processing is done with the investor rather than the lender that you are in contact with. We bought our home with a broker and it was a nightmare because the loan was being underwritten by someone in a corporate office who did not have any inclination to meet our closing date. There was really nothing the broker we worked with could do to expedite things. We had to delay closing 3 times. Many deals with a broker are just fine but be aware that you do not have as much control over the process as you would with a direct lender.