Getting a mortgage- who to go to?

[essjay43]

I plan on purchasing a home soon, but I'm overwhelmed by the amount of options out there. In previous discussions with mortgage brokers, my wife and I would qualify for about 500k, but I plan on spending less- 350-400k. After selling our current home, we should walk away with 40-50k.

This might sound silly to some people, but all of the combinations of rates, points, fees, different down payments, and closing costs make my head spin. I qualify for a lot of different options including Navy Federal's 100% financing.

Do you get a better deal with a Mortgage Broker or going directly to banks/credit unions?

Hope this isn't too open ended, but any advice would be helpful.

[DaveR]

You have to remember, a broker gets paid somehow. And that somehow is lurking somewhere in your wallet. That said, a broker will be able to find you options at lots of different banks. They know what's out there and can help you with the process and options. A good broker can be more they worth the fees paid.

As far as all the options, the way I think about it: points are a gamble (I don't gamble), shop for low rates, and negotiate all fees (including closing costs) as close to $0 as possible. Banks bundle and sell of mortgages. Why would they do that? Maybe the interest paid on the mortgage isn't that valuable to them, so selling the loan allows them to get their money back and available to loan again (more fees, points, closing costs, yeah!) to the next borrower. Something to think about.

Oh, and hopefully that $350-400k price range will get you just "enough" house for your needs. The bank will tell you that you can afford much, much more than you truly need.

[Another Reader]

Brokers get their funds from the wholesale side of the market, so some of their mark-up is there.  A good broker can be very helpful if your file is difficult to underwrite.  If your loan is plain vanilla, W-2 income, long time on the job, strong credit scores, try AimLoan.com or look at PenFed CU.

[essjay43]

Thanks for your input. I'll check out aimloan and penfed. I guess it's just hard to find someone to trust. I bought my first home when I was 24 and definitely made a lot of mistakes.

[cchrissyy]

When I bought, I used a broker because my situation was a little tricky (self-employment, etc)

when I re-financed I used a credit union because they had the best price and service

[Lady Fordragon]

When my husband and I bought our house, we went with our credit union because it was offering low rates and we already had our business with them.

[rhv70]

I've used Provident Funding (provident.com) for the last 3 refis I've done.   They have the lowest rates I've seen.

[essjay43]

The biggest wild card I've seen is closing costs.

[Clean Shaven]

Might be worth looking at Costco's mortgage offers for comparison.  They claim to have very low closing costs and give a $ kickback in the form of a Costco gift card.

[Lady Fordragon]

Might be worth looking at Costco's mortgage offers for comparison.  They claim to have very low closing costs and give a $ kickback in the form of a Costco gift card.

Wow!  Didn't know that you could go through Costco for your mortgage.