Would I save money with a direct lender/bank as opposed to a broker or correspondent?

Asked by Infoseeker, Raleigh, NC Thu Dec 6, 2012

I have read that cutting out the middleman can save money. With a broker it is the commission. I am not sure what a correspondent gets, could be the yield-spread-premium, and I was thinking of contacting wholesale mortgage lender but I am not sure if they only work with brokers.

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Ernie Behrle’s answer
Ernie Behrle, Agent, Raleigh, NC
Fri Dec 7, 2012
Larry had an EXCELLENT answer and I concur about not marrying yourself to a bank. A good mortgage lender will shop many banks and lending institutions for you and find what best fits you! One exception I am aware of is people who are members of the State Employees Credit Union ( SECU) seem to have good success there. If you are looking for a good lender and I recommend her a lot just because we have worked together now since 1994 with not one time has she not been able to get a loan through that she said she could. Wish I could say that about some others. Call Natalya Hill at 919-614-0388. Good luck and if I can be of any service to you, don't hesitate to contact me or visit my website at http://www.RaleighHomeSite.com.
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My NC Homes…, Agent, Chapel Hill, NC
Fri Dec 7, 2012
You as a consumer do not have access to wholesale mortgage lenders.

You need to understand that lending market is hyper competitive. Not every buyer is a good fit with every lender. There's no particular advantage using a bank over a mortgage broker in fact I would tell you that most buyers are better off with a mortgage broker who isn't married to a single bank but has dozens to work with based on your profile. You're over analyzing. Today's rates are half of what the 50 year average is and 1/8 or a point means next to nothing in the long term. What matters is the ability of the lender to efficiently process your loan with the least amount of aggravation on your part and give you a final loan commitment in a timely manner.

That said there is a huge difference in the service you're likely to get between various lenders and more importantly there's a big difference between what the banks like Wells Fargo, Suntrust and BOA can do in terms actually performing the task you hire them for (Giving you a competitive mortgage in a timely manner) and what a good mortgage broker or smaller bank can do. As someone who closes an average of one transaction a week, I can tell you that I will never allow a client to use BOA (their that bad), and while I personally like a number of originators at Wells and Suntrust they haven't been able to close a single transaction on time in the past couple of years and my buyers all report that both banks were nothing agony to work with.

My advice is to ask your buyer broker for some recommendations, using one of their preferred lender will enable them to jump in and help push things through if necessary.

If you aren't working with someone, feel free to contact me directly through my profile here on Trulia and I'd be happy to give you a few names and numbers of some excellent local lenders.
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, ,
Thu Dec 6, 2012
Yield spread premiums no longer exist, but yes, banks make money when they originate loans and the current rates are competitive.

You can check real time online quotes at my website 24/7 and actually select any interest rate that you want.

Apply securely online or call anytime!

I am licensed to originate loans anywhere in NC and would be happy to help.
0 votes
Larry Story, Agent, Greensboro, NC
Thu Dec 6, 2012
Infoseeker,

banks versus broker is a long standing discussion. What you can definitely do is to get a pre-approval from more then one lender. Now as long as you are going to buy a home within 30 days you will not damage your credit but if you constantly shop around and too many lenders are pulling your credit it will actually start to lower your score.

Now when speaking to a lender any money saved will be in the closing costs and of course the interest rate. Some brokers will actually discount some of the closing costs because they actually make more money down the road when they sell your loan to one of those larger banks.

You seem to be doing your homework so I encourage you to continue to do your research and just call the lenders to see what their closing costs are and the interest rates. If someone has a lower closing costs but a bit higher interest rate you need to understand that will cost you more in the long run.


Hope this helps,
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