Posted on: 30th Mar, 2007 11:29 am
Hi,
I was wondering, is it better to go with a Mortgage Broker or Lender?
I was advised that a Lender can get you a better rate and they already have the loans that they can offer you while a mortage broker is a middle man that tries to find banks that will finance your loan and they may or may not be able to get you the rates that a lender may offer.
I am having a hard time figuring out which one my husband and I should go with for our first home purchase?
We are trying for a 100% loan, but so far I was told by one mortgage broker that is a lender as well, that we should go with 2 mortgages: (1) a 30-yr fixed, and the other (2) a 30 to 15 yr as my first mortgage. But I can't image that's the best way to go for a first time homebuyer???
And I was told by another one that we are only getting approved for Arm loans: 80/20. But aren't those the loans people are defaulting on now a days???
My husband and I are looking for a great starter hime- a townhome but preferable a house- for us to start our life in. We cannot continue wasting our $$ on renting.
I'd really appreciate a straight answer! Thank you!
I was wondering, is it better to go with a Mortgage Broker or Lender?
I was advised that a Lender can get you a better rate and they already have the loans that they can offer you while a mortage broker is a middle man that tries to find banks that will finance your loan and they may or may not be able to get you the rates that a lender may offer.
I am having a hard time figuring out which one my husband and I should go with for our first home purchase?
We are trying for a 100% loan, but so far I was told by one mortgage broker that is a lender as well, that we should go with 2 mortgages: (1) a 30-yr fixed, and the other (2) a 30 to 15 yr as my first mortgage. But I can't image that's the best way to go for a first time homebuyer???
And I was told by another one that we are only getting approved for Arm loans: 80/20. But aren't those the loans people are defaulting on now a days???
My husband and I are looking for a great starter hime- a townhome but preferable a house- for us to start our life in. We cannot continue wasting our $$ on renting.
I'd really appreciate a straight answer! Thank you!
It is always best to shop around. Going with a Lender, you are only going through one type and can only offer limited programs. Working with a Mortgage Broker (not always the middleman because sometimes they work for a bank and can originate their own loans) can provide you more options since they have relations with a good number of other lenders.
The best thing I suggest to you is to do work with both. This will cause the Mortgage Broker and Lender to compete. The beauty of competition is that you win at the end because they will try to earn your business. However, you should also do you research and when you do decide which lender to go through, have them explain everything in detail before signing any documentation. Also, it is ok to ask for a second opinion.
Hope my information helps.
The best thing I suggest to you is to do work with both. This will cause the Mortgage Broker and Lender to compete. The beauty of competition is that you win at the end because they will try to earn your business. However, you should also do you research and when you do decide which lender to go through, have them explain everything in detail before signing any documentation. Also, it is ok to ask for a second opinion.
Hope my information helps.
100% financing is more preferable then going with 2 mortgages (many do offer such loans, some I know about are, wells fargo, wachovia..) but you need to have good credit to qualify.
If you do not plan to move out within a few years then taking a fixed rate will be advisable then going with a arm.
If you do not plan to move out within a few years then taking a fixed rate will be advisable then going with a arm.
Sorry, I didnt read your whole post.
Who ever you're dealing with, see if they can provide you an FHA loan. that is great for 1st time homebuyers and also all you need a 3% down. Some lenders (such as who I work for) offer FHA with FHA downpayment assistance program. Look into those.
Hope this additional information is some assistance
Who ever you're dealing with, see if they can provide you an FHA loan. that is great for 1st time homebuyers and also all you need a 3% down. Some lenders (such as who I work for) offer FHA with FHA downpayment assistance program. Look into those.
Hope this additional information is some assistance
"I was advised that a Lender can get you a better rate and they already have the loans that they can offer you while a mortage broker is a middle man that tries to find banks that will finance your loan and they may or may not be able to get you the rates that a lender may offer."
It is not always true that a lender will be able to provide you better rates. Broker also have lot of business association with a variety of lending institutions and can help you get most competitive rate available in the market.
As Wablola said you need to shop more instead of going with just one lender or broker, that way you will be able to judge what the market is like and what options are available for you. The more you will interact, more knowledge you will gain about various loan programs and their advantages.
Miller
It is not always true that a lender will be able to provide you better rates. Broker also have lot of business association with a variety of lending institutions and can help you get most competitive rate available in the market.
As Wablola said you need to shop more instead of going with just one lender or broker, that way you will be able to judge what the market is like and what options are available for you. The more you will interact, more knowledge you will gain about various loan programs and their advantages.
Miller
Hi Yadira,
Congratulations for making your first attempt to home-ownership.
You may approach either a mortgage broker or a lender depending upon how much you can afford and manage later on when you make the monthly payments. Moreover, you need to understand what type of rate they are offering you - whether it is a fixed or an adjustable rate loan depending upon which you can calculate your payments and then compare them. Based on the rates you can afford, and the monthly payments, you can then decide to choose the loan option that suits you best.
You need to be a bit careful about choosing between a fixed rate loan and an adjustable rate loan because it is true that a number of people are defaulting nowadays, especially those going for adjustable rate loans.
However, everything depends upon your affordability and your financial status. Whether you go with a broker or a lender, you need to gather the right information about the loan programs he offers, the rates and the fees that are required for you to take out the loan.
Hope this helps..
God bless you.
Samantha
Congratulations for making your first attempt to home-ownership.
You may approach either a mortgage broker or a lender depending upon how much you can afford and manage later on when you make the monthly payments. Moreover, you need to understand what type of rate they are offering you - whether it is a fixed or an adjustable rate loan depending upon which you can calculate your payments and then compare them. Based on the rates you can afford, and the monthly payments, you can then decide to choose the loan option that suits you best.
You need to be a bit careful about choosing between a fixed rate loan and an adjustable rate loan because it is true that a number of people are defaulting nowadays, especially those going for adjustable rate loans.
However, everything depends upon your affordability and your financial status. Whether you go with a broker or a lender, you need to gather the right information about the loan programs he offers, the rates and the fees that are required for you to take out the loan.
Hope this helps..
God bless you.
Samantha
Yadira,
100% financing can be a good option for first time buyer. But it is better to go with a single loan rather than take out two loans, especially if you are a first time buyer.
100% financing can be a good option for first time buyer. But it is better to go with a single loan rather than take out two loans, especially if you are a first time buyer.
I think the more important perspective is finding the right loan officer to work with. I know and trust loan officers in both types of companies. What you shared of your transaction seems like a very straight-forward first-time homebuyer purchase. If you were looking for a more random loan, a mortgage broker is probably a better source as they are more familiar with exotic loan programs. A home buyer with high credit scores and a high net worth is probably better served with a lender, especially a bank, as they will waive all sorts of costs to make that home buyer a customer of the bank. But neither of these describe you and your situaiton.
My suggestion is to interview loan officers of both types of companies and ask the following 4 questions:
1) can the loan officer give you 5 former clients, specifically first-time buyers, who you can call or e-mail to ask about their experience in working with them.
2) how long has that loan officer been in the mortgage business (less than 2 years would concern me)
3) how many first-time-homebuyers has the loan officer get financing for in the past 2 months?
4) how accurate are the loan officer's estimated closing costs compared to final closing costs? (sure, the loan officer could lie but this is a great question for letting your instincts tell you how honestly you think they answer the question).
Use these questions and you will pick the right loan officer for you.
Good luck
My suggestion is to interview loan officers of both types of companies and ask the following 4 questions:
1) can the loan officer give you 5 former clients, specifically first-time buyers, who you can call or e-mail to ask about their experience in working with them.
2) how long has that loan officer been in the mortgage business (less than 2 years would concern me)
3) how many first-time-homebuyers has the loan officer get financing for in the past 2 months?
4) how accurate are the loan officer's estimated closing costs compared to final closing costs? (sure, the loan officer could lie but this is a great question for letting your instincts tell you how honestly you think they answer the question).
Use these questions and you will pick the right loan officer for you.
Good luck
Indeed some useful questions Ken and the ones that will help people over here and their friends as well.
The next time I find someone making a choice between a broker and lender, I shall surely help him by keeping in mind your suggestions.
The next time I find someone making a choice between a broker and lender, I shall surely help him by keeping in mind your suggestions.
Shop only 3 places so your credit will not be adversly affected:
1 Bank (maybe the one that has your checking account), 1 Credit Union, 1 reputable Broker.
The bank has to pay the salaries of it's employees and the rent or mortgage on it's property that you walk into to apply for the loan and keep the lights and phone on so don't be fooled by 'lower rate' advertising.
The Credit Union same thing however they are governed differently from banks and you may find a great deal!
The Broker will shop many lender's and the lender's pay the broker to bring them customer's, the lender does not have to pay for the Broker's lights, phone or salary. You typically will get at least .50% lower rate with a Broker than a Bank.
The credit union might surprise you though...
1 Bank (maybe the one that has your checking account), 1 Credit Union, 1 reputable Broker.
The bank has to pay the salaries of it's employees and the rent or mortgage on it's property that you walk into to apply for the loan and keep the lights and phone on so don't be fooled by 'lower rate' advertising.
The Credit Union same thing however they are governed differently from banks and you may find a great deal!
The Broker will shop many lender's and the lender's pay the broker to bring them customer's, the lender does not have to pay for the Broker's lights, phone or salary. You typically will get at least .50% lower rate with a Broker than a Bank.
The credit union might surprise you though...
