Financing in Torrance>Question Details

Paul, Home Buyer in

I'm trying to determine if it's better to get funding for a mortage from a bank or a mortgage broker.

Asked by Paul, Tue Aug 26, 2008

I'm currently renting, have had the same job for 9 years, have excellent credit, and able to put down 25% on a condo or townhome. I'm looking to get the best rate with a reputable institution and just don't know who to turn to. So far B of A looks good and maybe Citibank, but I'm afraid to take a leap with anyone. HELP !!!

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Paul:

Congratulations on your excellent credit score, longevity on the job and substantial down payment. In this market, you stand out from the crowd. In the Torrance area there are a number of excellent direct lenders and brokers. Having worked with many of them, I would be happy to give you referrals where you can comparison shop without obligation. Contact me through my profile if this sounds like something you would like to do.

The prior posts all have great information. My experience in the local market is, direct lenders tend to have better up front fees, but not necessarily the best rates. So, for instance, my Countrywide rep can keep your total loan costs around $1,000, but one of my brokers can get you 1/4% lower interest rate. One of the deciding factors for you, the home buyer, is how long do you plan to stay in the home. If you plan to stay there through retirement then a lower interest rate will save you the most money. If you plan to move up or out in the next 5 years, then lower up front costs may be the best way to go.

Recommended - get one or two quotes from a direct lender and one or two quotes from a reputable broker. Do a cost / benefit analysis and then take the plunge for the best financing package overall. Let me know if I can be of further assistance in helping you with this and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
310-710-8572
1 vote Thank Flag Link Wed Aug 27, 2008
Paul, I have been a homebuyer like you. And I've bought many homes to live in and as an investment. One thing I liked when I was shopping and had to talk to lenders...was dealing with a mortgage broker over a direct lender...why? I'll tell you! For one, B of A , Citibank, or any other bank is just that..... A BANK!.
Each one of these banks only has their OWN loans and programs available to them. A mortgage broker has access to over 5000 different lenders. He or she can shop from all these lenders and banking institutions to see who truly does have the best loans and rates for you. It's kind of like car shopping. Let's say you want a
2005 Toyota Prius...and you go to one dealership that sells those on his lot and you only have THOSE on his lot to choose from...or you punch in the information on a site like http://www.autotrader.com and you view thousands of Toyota Prius's for sale within your search radius at many different car lots and private parties..now.... are you going to get a better deal that way? ...or buy staying on one guy's car lot and picking only from what HE has to offer?Contact me at 310-429-4170 or shy@shysells.com and I will put you in touch with one of the best lenders here in Ca...who is a broker and who has access to thousands of loans and programs...and many where you can put 3% down and get all of your closing costs waived.. Believe me, if this lender wasn't the goddess of loans, I wouldn't use her or refer ANY client to her..she has beat out many other institutions, when they couldn't help someone, and knew more programs..many "zero down" etc...than anyone at any B of A or Citibank...She is reputable, ethical, and the ceo of the company...here in Torrance, Ca.
Hope this helps you...Shy 310-429-4170
Web Reference: http://www.shysells.com
1 vote Thank Flag Link Mon Oct 27, 2008
If you are looking for the lowest fees, i would go to a direct lender. If you are wanting more personalized and involved service, a *reputable* broker. If you are wanting the best reputation and best lending practices, a bank.

Hope I was some help! If you want more info just ask, I have a ton of information on how and why banks differ from lenders and lenders differ from brokers to help you make an informed decision.
1 vote Thank Flag Link Sat Aug 30, 2008
Hi Paul,

As all the posts indicate, there are Pros and Cons with both the Bank and Brokers. Because the Market is still a bit turbulent, then I'd highly recommend speaking with somebody, whom you trust and make sure they are able to fit you into a loan program that can fit into your short- and long- term financial goals. I have an office in Torrance and am a Direct Lender with the ability to Broker, so we have the best of both worlds. If you'd like to communicate, then please feel free contact me any time. If you are in escrow currently, then I'd highly recommend acting soon because it can take a bit to get everything ready to release your contingencies.
Web Reference: http://www.mikebjork.com
1 vote Thank Flag Link Wed Aug 27, 2008
With excellent credit and 25% down, you best bet would be to go directly to a institution. Chase, Bank of America etc... Most Brokers are commissioned based, essentially they will pull your credit, shop around for a loan, which in my experience most lenders they contact will pull your credit as well. Brokers are quoted a wholesale rate. Just like a buying a car, anything they can get above that rate is their commission on the back end. If they can convince you to pay a point or two to buy down your interest rate, that usually goes directly into their pocket. Typically this translates into higher closing cost and interest rates. Not to mention that most likely your loan will be repackaged and sold to another investor/servicer.

What I would suggest doing is pull your credit with one of the 3 national credit companies and do a 3 in 1 credit profile with scores. Call a couple of banks you are interested in and give them your exact score. Usually they will ask for your middle score. Keep in mind though if they pull your credit, I believe there is a 14 day period that you can shop around without it effecting your credit score. Have them quote you a rate based on your information and give you a "good faith Estimate" and compare closing cost and fees. Usually you will find them to be much cheaper then a broker. Most of your larger institutions keep and service their own loans.
1 vote Thank Flag Link Tue Aug 26, 2008
Paul
I like Brian's suggestion. You should know that particularly in this financial market, lenders do not have as much control of the lending process as they did a year ago. That means that it might make sense to actually consider submitting apps at more than one lender. An ideal scenario might be a direct lender, like Wells Fargo or B of A, and a mortgage broker.

In a typical market escrows fail to close on time about 45% of the time, and when they fail to close on time 70% of the time it is a lender issue. In this financial market it is worse than that.

Talk with your Realtor about lenders that they like, know, and trust.

Good luck!
1 vote Thank Flag Link Tue Aug 26, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
I'd recommend getting a "Good Faith Estimate" of the closing costs from each lender and compare the fees and costs associated with both. They should be able to provide this at your request. To answer the question, mortgage brokers tend to have a wider selection of loans, and because they work with numerous lenders, tend to come up with the lowest interest rate available to you.
1 vote Thank Flag Link Tue Aug 26, 2008
I have nothing against mortgage broker, I use them all of the time, but you might be better off going with a direct lender. You have good credit, 25% down and stable as far as employment. What you could do is go to a mortgage broker and ask for a good faith estimate. See what a broker can offer you and compare. Your real estate agent should be directing you to the right path, if you aren't working with one, I would be glad to help. E-mail me dyannaavila@hotmail.com

Good Luck!
Dyanna
1 vote Thank Flag Link Tue Aug 26, 2008
A mortgage broker will always have more options than a bank/direct lender. With a bank they have say loans a,b,c,d,e you qualify for them or you dont, the points are set, the rates are set and thats it. with a mortgage broker they have more incentive to go to several lenders and get the best deal for you, they will be able to present different options with different banks to assist you instead of say just 6 types of loans. Good luck with purchase paul
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Nov 2, 2008
Over the last few years, loan brokers were able to shop loans around and find the best possible option. But that was then and the market has changed. Direct lenders have the necessary funds and the most amount of flexibility in todays market. I use both, but in todays market, it is Countrywide/BofA that is getting the job done. Try Nick Costa at the local Torrance branch of Countrywide at 310.941.1666
0 votes Thank Flag Link Sun Nov 2, 2008
These are normal emotions and no matter who you go with there is no gaurantee on how things will end up so it's understandable If you feel like you need more detail information about the whole loan process or just another opinion then feel free to contact me because loans is what I do.

Good Luck to you.
0 votes Thank Flag Link Tue Aug 26, 2008
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