Retail loan vs. Wholesale loan through broker

6 Replies

I recently spoke with an independent mortgage broker about getting a loan.

The broker said I would qualify, and after giving in my information, he said that the loan would be through an online lender that offers retail loans.  I received an email from the wholesale department of the online lender with next steps.

The broker charges a large broker fee.

Is it advantageous to complete this loan through the broker, or would I get the same product and avoid the broker fee if I just contact the online lender directly and get a retail loan?

Do brokers get better rates/products that regular retail customers?  

Will I end up saving over the life of the loan by paying the broker's fee up front?

Can a broker get me qualified for a product that I would not qualify for on my own?

Are there other fees that I would be paying directly to the loan company that I am avoiding by going through the broker?

Thanks

The mortgage broker makes his living by putting investors like us together with lenders.  They usually have better contacts and get us moved to the front of the line.  You didn't mention what the fee was.  My broker charges 1%.  I would suggest you consider more than just the cost of all of this.  There is the ethical issue as well.  Ask yourself if you would have been able to make the contact without the broker.  If not you should consider paying him.  And you can always negotiate the price.  Ask him what he brings to the table and will it save you time and aggravation.  That's worth a lot right there.

Good luck

I would shop around directly with other lenders to see what they can offer. A broker gets paid by you, so that is just including a middle person taking a commission. What LTV are you at on the loan? Are you going with conventional guidelines with the approval?

2.25% is really high.  And if you already made contact what in the world is he bringing to the table?  A good broker has the inside track with VPs and other senior managers at all sorts of lenders.  Sounds like you know how to find lenders.  

Maybe I should be a broker.  Sounds like a lot easier than what I'm doing now :)