Should I use a mortgage broker or a bank?

Ron Lieber of the New York Times recently published an article comparing the services of a mortgage broker and a bank when securing a new mortgage for your home. His conclusion? Banks are super-busy, and you may have delays and heartache when trying to reach your loan processor during your application process. Mortgage brokers may give better service but end up costing $300-$425 more than working with a direct lender.

Chelsea Mitchell from Redfin advises:

“So, that said, I’d beg to differ over how much of a “better deal” you really are getting. I’d be willing to pay the mortgage broker a little extra to be reachable, explain processes and get my loan processed on time, just for peace of mind.”

So if you are buying a home, which should you choose? While banks are swamped and sometimes bureaucratic, we continue to have good luck with our recommended loan officers at MetLife and Countrywide. When lenders are busy, a good loan officer can make all of the difference. We also continue to refer clients to our trusted mortgage brokers as well. Even in a market where the number of mortgage brokers is contracting quickly, the good ones are still able to pull together great loans for their clients.

Our conclusion is that both mortgage brokers and direct lenders have their place in today’s volatile mortgage market. If you are searching for a recommendation, ask your real estate agent. We work with lenders every day and don’t take our recommendations lightly. We have no financial incentive when you choose a lender and make our recommendations based on past experience with other clients. Your agent should give you a handful of lender recommendations. Take those recommendations and interview each one. You’ll likely find a lender who you feel most comfortable with.

  • http://www.ditech.com Ditech Home Loans

    A few comments regarding the New York Times article: Banks, lenders, and brokers can get paid through a yield spread. Banks and most mortgage lenders are not required to disclose a yield spread. A mortgage rate is typically guaranteed only if the rate is locked. A signed fiduciary guarantee for the good faith estimate is not a common lending practice, that’s why it’s called an estimate.

  • http://www.ditech.com Ditech Home Loans

    A few comments regarding the New York Times article: Banks, lenders, and brokers can get paid through a yield spread. Banks and most mortgage lenders are not required to disclose a yield spread. A mortgage rate is typically guaranteed only if the rate is locked. A signed fiduciary guarantee for the good faith estimate is not a common lending practice, that’s why it’s called an estimate.

  • http://www.everhomemortgage.net everhome mortgage

    So is paying a lot more money worth knowing they will be there every time you call or is going the cheap way but never knowing when you’re going to get a hold of them the better way. They both sound stressful to me

  • http://www.larryfry.com/ utah mortgage broker

    Mortgage brokers have had spectacular growth in the past 10 years and they have provided great competition for the banks. They can be great for customer service and can act a bit like a home buying coach if you get a good one.