Hello i need some help!!! I fixed my credit and it is looking better at 655- 630- 619.

Asked by Lucy Rangel, Fate, TX Fri Jul 17, 2009

The credit restoration agency referred me to a broker (John Hopkins)from Southwest funding.I am kind of scared of using a broker because of all the bad things that i have heard like they are only looking for their best interest not mine, would it just be best for me to find a bank.

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T.E. & Naima…, Agent, Dallas, TX
Fri Jul 17, 2009
Banker or broker is a good question. Bankers have their own product lines that they offer. They can usually make a decision more quickly than a broker. Brokers have multiple lenders (banks and others) that they work with. So, it is like the classic question of whether you ask an insurance carrier who offers only their own policies, or whether you ask an independent agent who handles policies from a variety of different carriers.

On some days the interest rates offered by one lender is better than another and on other days the rates offered by a different lender are lower or higher. The banker can't really shop among the lenders out there, while the broker can, and he can pick the rate that is lowest at the moment among all of those.

Neither bankers nor brokers have a client relationship with you. This means that while they are obliged to treat you honestly and fairly under the law, they work either for themselves or for their respective lender. So, actually what you heard was only partially correct -- banks look after their own interest, too. Does this mean you should look only at brokers? No, you should look for the best deal for you.

If a broker offers a package that results in $4,000 to bring to the closing table and monthly payments of $990 a month, while a banker offers you $4,400 and payments of $980, then you get to pick whichever one makes more sense to you. (This of course means that the length of the loans are identical and other terms similar.) In this example, you would have to weigh whether saving $400 in upfront money is worth paying an extra $10 a month for 30 years. But the numbers could have been reversed and the banker offering $3800 with $995 a month payments, and you'd have to weigh the $5 over 30 years versus the $200 savings at the bank.

There is no single right answer when comparing closing costs and monthly payments. The main thing is to remove other costs from the monthly payment so that it is a fair comparison. For example, suppose the bank estimates your monthly payment for insurance escrow as $110, while the broker says it's $100. Neither answer makes any difference because you're going to get your own homeowner's insurance and the monthly escrow amount would be identical on both loans. So, remove the tax and insurance escrow estimates from the monthly payment and compare only principal and interest between competing quotes (GFEs). Whichever P+I payment is lower does matter.

Similarly, closing costs include both prepaids, like insurance, and lender charges, like processing fees. You should compare the bottom line on competing quotes by including only the lender-controlled fees, not prepaids for taxes, insurance, etc. Another place where comparisons fail is in the daily interest. Make sure that both Good Faith Estimates show the same number of days. If one shows 1 day of daily interest and the other shows 15, you may unfairly favor the 1-day quote when the 15-day quote is actually better. To compare them increase the one with the fewest days to match the other one, by the daily rate times the number of days you added.

Any trustworthy loan officer, whether working for a broker or a banker, will be able to show you these things and explain them. If he can't explain or won't, choose a different person to deal with.

Having cleaned up the cash needed to close and the monthly payment you can compare GFEs fairly, but remember it is your choice if you want to save $300 but pay $11 more a month or pay $600 more upfront and save $18 a month. No one else should make that choice for you -- just like no one should tell you to use only a banker or to use only a broker. Pick the one you're most comfortable with after talking to a few and getting recommendations from your friends.
Web Reference:  http://www.Mortgages-TX.com
1 vote
Lisa Montes, Agent, Carrollton, TX
Thu May 3, 2012
Your credit score is in good shape to purchase a home. However, I would recommend shopping around a bit to see who and what is out there. Ask friends, family, co-workers for referrals. I do not recommend going with someone just because they can promise you the lowest rate. It has been my experience to use someone that you feel comfortable with to get the job done (research the company as well). Your comfort level and their commitment to you equals greater success. Rates are pretty standard across the board! Also, inquire about an FHA loan as it seems to be the most popular these days. If you are a Vet the VA loans are outstanding as well. Let me know how I can help!
Check out my website for some great listings at http://www.yourhomeretriever.com

Lisa Montes-"Your Home Retriever"
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Fri Jul 17, 2009
Hello Lucy and congratulations on your very good work.

With the changes that you have made to your credit, you will most certainly qualify for a loan now. As for using a mortgage broker, in addition to the comments of my colleagues, might I also note that a good mortgage broker can work miracles to help you find a low cost, low interest loan that you can afford.

A bank's loan officer will be able to provide you with, basically, only those loans that the bank provides. In many cases, banks will not do FHA loans, so if you do not have much money for a down payment, then a bank may not be able to help you. Also, as Tom noted below, I find that banks have some of the most stringent lending requirements because they can attract some of the very best clientele for their loan products.

On the other hand, a mortgage broker represents many available bank loan sources from traditional banks to more specialty loans. My own mortgage brokers can get loans from Wells Fargo and Bank of America as well as from smaller banks using TARP funds to make home loans. Think of a mortgage broker as being a "mall of loans" rather than just one loan source.

Tom in Texas has kindly offered his services to you, and you might want to give him a call. I also have great respect for Bob McClure in Michigan, and if I had a client who needed a loan there, I'd certainly send that person to him. If you have any questions, you can call both Tom and Bob, and I'm sure that they can answer your specific issues about mortgage brokers and bank loan officers in a knowledgeable and unbiased fashion.

Good luck!!

Grace Morioka, SRES, e-Pro
Area Pro Realty
0 votes
, ,
Fri Jul 17, 2009
Not necessarily. Remember, it is the loan officer doing your loan not the bank.
You need to get referred to a trusted loan officer.

Now, a bank may be the most stringent as far as underwriting goes..... a broker will send your file out to a bank. But a mortgage banker will close and fund your loan inhouse BEFORE selling the loan. Kind of like best of both!!
A good loan officer has your best interest at heart because they will live off of your referrals later.
0 votes
Tommy N. Eze…, , Rockwall, TX
Fri Jul 17, 2009
Give me a call. Visit http://www.sellandbuydallas.com
0 votes
Bob McClure, Other Pro, Walled Lake, MI
Fri Jul 17, 2009
good afternoon lucy..no, quite the contrary....i have been a mortgage rep in michigan for going on 15 years....the advantage a broker has over a bank, is that the bank has one set of programs...their's!.....a broker has numerous lenders that creates the flexibility to direct a loan to the investor that will most likely accept your circumstances and fund your deal.....most all mortgage investors that fund loans through mortgage brokers have some sort of uniqueness and niches about how they underwrite which makes using a mortgage broker much more likely to fund your deal than a bank...you may feel more comfortable talking to two or three by phone before giving any of them your personal info, just to get a comfort level with their experience and expertise........best of luck to you..bob mcclure- success mortgage partners- plymouth, michigan.......
0 votes
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