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Here is the question….

Roger asks,

“I am looking to buy my first house and my agent is pushing a mortgage broker. I wanted to know if mortgage brokers are always better than going to my bank.”

My answer:

Roger, in a word…maybe!

Given that direct lenders and banks can legally hide the income they make from increasing your rate and brokers can’t…I have to conclude full disclosure is always better than non-disclosure.

I case you are just now getting acquainted with our site…knowing how banks differ from brokers with their desired compensation and how they go about getting it, is of primary importance if you are going to shop correctly for a mortgage.

Please read all questions and all article about Yield Spread Premium…and you’ll know a lot more than most.

There are shopping advantages as well. When a customer uses a bank, they get the bank’s loan products and the bank’s rates. A mortgage broker has mulitple wholesale lender contacts so they can shop between them for a better rate.

But there is a catch and the reason I said “maybe”. Never use a mortgage broker referred from the real estate agent. I wrote an article on the topic, Real Estate Referral Con Game.

If a mortgage broker is to be used, you have to find them on your own. To learn just how to locate the best local mortgage broker, click here.

Thanks for the question!

Good Luck!

Author: The Mortgage Insider

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