Does anyone use mortgage brokers?

Question

We're looking to buy our next property and wanted to know if mortgage brokers are a good idea. The 2 of us have very demanding/time consuming jobs (that we plan to get away from, thanks to BP) and dont have the time to go from bank to bank finding the best rates.

We only have a mortgage on our primary home, and plan to put down 20% on the next investment property we find.

Would you use a mortgage broker?  Does anyone know of any good ones in Central Florida?

Allende Hernandez · Answer

Hi @Justin Stamper, I am dusting off this old thread to ask you how was your experience with Approved Mortgage. I am looking for a Mortgage Broker in Orlando that can help me screen potential tenant/buyers in LO scenarios.

Thank you in advance!

Justin Stamper · Answer

Right now I am doing a deal with Approved Mortgage in Downtown Orlando. They have been nice people, but the deal has not closed yet, so I cannot speak for their performance! (but friends can, which is why i am here)

Mark Dolan · Answer

Hey was searching for some info on mortgage brokers and found this old thread. I am currently trying to purchase my first investment property and somebody recommended a mortgage broker to me. The reason being is that I am a little worried about my lack of consistent income due to the fact that I am self employed and not on any W-2'S. It seems like a mortgage broker may not be necessary however based on some of the replies above. I was just wondering if anybody felt that a broker can be useful in cases where the buyer does not have a very solid history of income? Thanks

Stephanie Medellin · Answer

Just to clarify for those who are hesitant to use a broker.  The biggest thing people are usually concerned about is the fee.

To take the mystery out of it, here's how brokers work.  Brokers get wholesale rates from lenders, which are generally much less than "retail" rates that you would get from a bank branch.  The broker's fee is usually paid by the lender and built into the rate.  These rates, even with the fee built in, are still usually the same as or less than "retail" rates.

You can choose to get a lower rate by paying an origination fee, but this is essentially the same thing as buying down your rate, or paying discount points.

Brokers have a wide range of lenders and programs to choose from.  When larger banks have overlays, brokers have lenders that don't.

Brokers will (hopefully) give more personalized service, making the whole process smoother for everyone involved.

Those are some of the key differences between retail banks and mortgage brokers.

Nathanael Cotterell · Answer

Im in the same situation. Does anyone here on BP know a good lender in JAX Florida?  Also any particular banks you would recommend?

Jerry Padilla · Answer

@Mike H.

You can go up to 10 properties with conventional financing, as you have stated. I would recommend a broker after the 10 properties are reached.

Jerry Padilla · Answer

@Jason Prendergast

Many times mortgage brokers charge an additional origination fee, versus a bank lender. It may or may not be worth it to you, but just be aware that you may have additional fees, going this route.

Mike H. · Answer

I would agree. If you're putting down 20% and have the conventional spots available, a mortgage broker makes little sense. Most of the big banks have comparable rates anyway.

To me, where a mortgage broker is useful is when you start running up against your conventional 1-4 limit. Once you go over 4 mortgage properties in your name, then I would recommend a mortgage broker so you can go up to 10 properties in conventional loans.

Most large banks don't offer the 5-10 loan products. So a mortgage broker is going to save you a ton of time on those loans.

If you decide to jump straight to commercial once you go over 4, then I'd go direct to the local banks anyway. Mortgage brokers don't tend to be as helpful in the commercial side of the local banks.

Jason Prendergast · Answer

Thank you

David Lopez · Answer

I am not very versed with a mortgage broker but have had some friends who had bad experiences and good experiences with them. If you have good credit and can borrow from a large bank it doesn't take much to look online at current rates. If your looking for smaller lenders then it will take some effort unless you go to loan searching sites like lending tree etc... But if you put in your info be ready for a lot of calls concerning the mortgage. Good luck and I am sure others will offer some more detailed expert advice.