Do I need a broker to buy a house?

msroseApril 25, 2010

Two people have mentioned to me that I should get a broker. I was told that the broker would find me the best deal on a loan and will show me a breakdown of all the costs, where as a mortgage company doesn't always show a breakdown of the costs. What are the costs that the mortgage company may not show me? Do I have to pay the broker and if so, how much does it cost? Can he really find me a better deal than if I call around and check rates myself? I was looking at lendingtree.com and it looks like their services are free to the buyer. Would you recommend going that route or would I be better off with a local broker?

Laurie

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mariend

Do you have a credit union or a local bank? Brokers don't always know the best rates and they sometimes recommend loan companies that will give them money back for recommendations. Deponds on what state you are in, but in some you have to go thru a Title company. That is important to make sure you have a clean title.

    Bookmark   April 25, 2010 at 8:52PM
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terriks

Regardless of whether you use a bank, a mortgage company or a mortgage broker, the lender must give you a Good Faith Estimate

    Bookmark   April 25, 2010 at 10:51PM
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Billl

I'm all for people trying to shop rates themselves. That is what we did and now found a great loan with great terms.

However, if you aren't all that familiar with the process, you probably want a real live human there to answer questions and help you understand the true costs. It is one of the biggest financial transactions you will make in your life, and what you don't know can definitely hurt you.

BTW - a good broker should do more than just find a low rate for you. They should help you understand the costs (both up front and long term) of multiple types of loans and make a recommendation on a product that best fits your needs.

    Bookmark   April 26, 2010 at 9:09AM
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brickeyee

"Regardless of whether you use a bank, a mortgage company or a mortgage broker, the lender must give you a Good Faith Estimate

The biggest problem with the GFE is that there is no penalty for supplying an incorrect GFE.

    Bookmark   April 26, 2010 at 10:15AM
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pamghatten

brickeye, there have been all kinds of regulatory changes .. if you are given a GFE that is too low, the broker/lender must then eat the costs that they quoted low unless they can prove something really changed and a fee changed because of that. Lots of lenders, and hopefully brokers, are now re-looking at how they quote costs.

On the other hand, if you are given a GFE that is very high, shop around for lower costs.

    Bookmark   April 26, 2010 at 1:34PM
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brickeyee

HUD trying suing to enforce the GFE and lost in federal court.

There is not a lot they can do.

    Bookmark   April 26, 2010 at 5:03PM
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msrose

Well, this is my first time buying a house, so it would be nice for someone to walk me through it. How much does it usually cost to hire a mortgage broker?

Laurie

    Bookmark   April 26, 2010 at 9:58PM
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terriks

It shouldn't cost you anything extra to hire a mortgage broker. They will get a commission from the lender.

    Bookmark   April 26, 2010 at 11:38PM
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