We’re looking at buying a house and went to an open house. The listing realtor’s “minion” mentioned that we should look at mortgage brokers, how their realty company has a relationship with mortgage brokers, etc. I was very skeptical and think my face showed that so he didn’t talk much more about it, but got my contact information and connected me with the mortgage broker they recommend saying things like “if you use our realty service for buying, this broker will offer you a special deal of x, y, z.” I haven’t done a lot of in depth research, but it appears at first glance that the broker is somehow related to realtor’s company, other than just a referral arrangement, so I’m pretty skeptical of this broker specifically.
But anyway, long story short, we’re looking at the possibility of using a mortgage broker and trying to weigh the pros and cons.
Has anyone used a mortgage broker? Is there any reason not to use a mortgage broker? Can I still look for lenders myself and use the mortgage broker for other lenders? If I send my information to the mortgage broker will I all of a sudden see 10 hard pulls on my credit reports?
Mortgage brokers may have access to better rates and operate at lower margins than the big banks or direct lenders. For example, Wells Fargo might charge you 3.5% plus points in branch, but their wholesale rate for the exact same product might be 2.75% without points (or with negative points), and this is what a broker would sell you.
IMO/IME there’s no advantage to using a local broker just because they’re local, unless they also happen to give you the best deal. So do as much comparison shopping as you can without hard inquiries, but do keep in mind that many brokers won’t give you an estimate without running a credit check. See the above thread for how to get estimates without credit inquiries.
They may give you something, but there’s no way to know how special the deal is if you have nothing to compare.