I am applying for a home loan:
I have got a GFE from a bank and they quoted around 5.30%(30 yr fixed – zero points)
I have got another GFE from a mortgage broker and they quote 4.85%(30 yr fixed – zero points)
1) Does a mortgage brokers usually give better rates than direct banks ?
2) How do I know that the mortgage broker will give me the GFE rate what he gave me today, so there are no surprises later ?
3) Are there any questions or something i need to ask the mortgage broker to make sure I am getting the right deal ?
Asked by:JohnPau2010
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Different lenders have different terms, which they report to mortgage brokers by sending out daily rate sheets. A single lender will have a certain set of terms for the individual loan product they offer. So, the mortgage broker might find a cheaper loan that the particular lender can’t match.
Also, I have seen where a lender offers a particular rate on the rate sheet, only to mysteriously not have that available anymore when contacted by the mortgage broker. Or, the terms (rate, discount points, etc.) aren’t the same when the broker calls them up to lock in the rate.
I would just ask the broker what kind of guarantee he can give you that this rate will be available when you’re ready to buy. I would also ask him to do a cost analysis between the two loans, to prove to you that one is better than the other.
Pretty much, they all have the same rates. However, with a mortgage broker, they are looking out for the best rate between a ton of different banks that they work with. If you go through a bank directly, they are only looking out for the OWN rates.
Your closing costs are going to be exactly the same through both, however. Everyone usually has around the same origination fees, processing fees, credit report fees, etc.
I would go through a mortgage company. They can lock you in with a different lender if rates or turn times are better somewhere else.
Your mortgage broker can shop all their wholesale lenders for the best rate on the programs that you are qualified for. The only way to guarantee a rate is to lock it for a certain time period; you can lock out for 30, 45 or 60 days. Some lenders charge a fee to lock, some do not. Rates change daily, sometimes several times a day, so unless your quotes come at the exact same time, you are comparing apples to oranges. Your mortgage broker will get you the best possible deal available on the day you are ready to lock your loan.