Rivercard

He did say banks are known to be "stupid and lazy" and that he often makes better deals. From what I understand some lenders on occassion offer better deals to brokers than they would to buyers.

82CardsGrad

I get that to an extent... And I'm sure there are some larger, more sophisticated and established brokers out there who actually know what they're doing and can professionally carry a customer all the way thru the process, from inquiry, to credit application and approval, to the appraisal process, to commitment and then to closing... However, I have not come across any that can do all of that as well as national lenders. And, the "deals" offered via brokers more often than not seem to be not "deals" at all... When you add in the discount points and other garbage fees charged by brokers, I often find the "deals" at national lenders to be just as good if not better... Factor in the huge reduction in paperwork and headaches, and it's not even close...

Gaddabout

Mortgage brokers sell money. If you go to a mortgage broker, it's no different than going to a real estate broker, except you're going to see their money listings rather than home listings.

Going to a bank for a loan is like deciding you're going to buy a house directly from the owner: Works great if you know what you're doing and you have a good idea of the value of the home.

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the desert gadabout

conraddobler

Brokers are for tough to do loans in the main.

The idea a broker can give you the cheapest rate is true, however the more standard your loan is the less you need me period.

I don't mess with great credit cookie cutter loans there is not money in it, that's a huge volume thing and in todays market that's just a giant headache and money loser.

Some brokers I know do that market well but wow is that hustling, and for chicken feed too.

I do the tough loans and make more and I'm much happier, never run out of business, although it goes up and down it's pretty steady for this industry.

The loans I do bail people out of other peoples mistakes, mostly referals etc.

I compete with banks once in a while, I usually win after the customers compare the deals and I don't use a gun so I guess there's something there.

The point is if you know enough and you compare you can save money at a bank but they aren't going to mention anything in the way of structuring your loan according to your situation and they could cost you literally thousands just by not asking a few questions.

My partner could show you examples for 20 years, he does high end loans big jumbos out of our other office, also a good niche but he's better with that type of borrower, I don't like that market the people bother me.

All I know is that they go to the bank, the visit him, he wins so much so the banks keep trying to hire him but that's tough when he's his own boss .

__________________
At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.

~Abraham Lincoln Lyceum Address

Gizmo Williams

Fully agree. Most consumers just need access to the internet and a mortgage calculator to make a decent decision on straightforward fixed and ARMs (and a basic understanding of the difference between the interest rate and the APR).

However, every bank offers loans beyond the ones that pop up on their website or on lending tree. For those the help of a mortgage broker is essential. I work for a bank, but I needed to use a mortgage broker when I needed a construction to perm loan. Most of the larger banks did not offer them...and the terms are pretty complex to compare across products.

Also, a mortgage broker basically has access to the loans at the wholesale rate which is lower than the retail rate the banks charge. So they can often offer a better deal than a bank...it just impacts their compensation. Like Conrad said the margins are tight on the vanilla loans so their is not much room for them to work out a deal...but they have more wiggle room on the more complex loans.

conraddobler

The problem is that Brokers got their hands into every conceivable loan and not just in the complex loans because there are way too many of us, once rates go up and the easy money dries up they'll go away it's the way it works.

Banks do pretty standard stuff that's why they are banks, if it's the least bit exotic they look at it like it's got the plauge or something, and that's fine banks aren't about a great deal of risk and they shouldn't be.

__________________
At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.

~Abraham Lincoln Lyceum Address

Gaddabout

It also depends where you're lending. A jumbo loan in Arizona couldn't buy you a 2BR cottage in Pasadena. It's probably necessary to get creative in California. When I left in 2005, they were doing 40-years, which at the time I thought was ridiculous. I'd hate to see the amortized value on those.

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the desert gadabout

conraddobler

As with anything there are good ones and bad ones.

The good ones are worth working with the bad ones are a negative.

Realtors are the same way, a good realtor can get your house sold or point out some reasons why to buy house A not house B.

I know people who scoff at using realtors and some of them hate the house they are in because they didn't know a couple of pertinent facts. I always use one and I know enough that I wouldn't need one, but I know a couple good ones.

My wife and I fell in love with a house, the realtor knew we loved it but went ahead and pointed out that A... it was built over a former creek and required 3 sump pumps which in AZ wouldn't mean anything but here it's the kiss of death and also that it had ploybutlene or something water pipes which is a big no no here.

She didn't have to say anything and we'd have bought the house.

__________________
At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.

~Abraham Lincoln Lyceum Address

82CardsGrad

Conrad - market up over 200 points at present on the back of higher than expected retail sales... yet with oil moving above $73. Amazing...

Now, I am not at all saying that the sub-prime issue isn't an issue, but are you prepared to ease off of the "catostrophic" characterization??

I have to admit, even a bull like me is amazed. I never bought into the sub-prime hysteria, but I did believe that oil would have a larger impact on both retail and industrial performance...
Does it have to go to $100 a barrel before the U.S. is "impacted"???

Heucrazy

I just got my house appraised and it has gone UP in value by $25,000 in the past year. You know the same past year were the sky fell according to some of you Chicken Little's.

Oh and I just got a bonus from work. Slow crippling economy and all.

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"I carry a gun because a cop is too heavy".

82CardsGrad

I laugh when I see people talk about "the real estate market" and how it's crashing...
Real estate was and always will be a local business... There will always be markets where prices are dropping, while others where prices are rising...
At the moment, many parts of the country are seeing prices stagnating or even dropping. While other areas are still seeing prices rise. And then you need to account for activity within price-ranges, within certain markets...
Generally, states like AZ, NV, UT & ID have enjoyed steady and strong price appreciation for an extended period now. And most forecasts continue to predict steady growth into the foreseeable future.
I would want to be selling a home in Detroit or Tampa right now. Heck, in certain price ranges here in Phoenix, if you are trying to sell right now, you could be in for a very long and maybe painful process...

Heucrazy

AZ, NV, UT, & ID will have continually rising housing markets as long as people are fleeing California to escape the high taxes needed to get the state out of debt.

Thanks Gray Davis.

__________________
"I carry a gun because a cop is too heavy".

82CardsGrad

I thought I saw a report not too long ago where it mentioned the Phoenix metro area has experienced a NET population gain over just over 11,000 people a month for the past 7-8 years!! Incredible...
I do know that Salt Lake City and the Boise area as well have seen dramatic growth over that same time...

Heucrazy

Reno surpassed the 500,000 mark a few months ago. And Henderson, NV a suburb of Vegas is even larger than that now. Nevada is growing at a rate that is great for the local economy but crappy for trying to get resident deer and elk tags every year.

__________________
"I carry a gun because a cop is too heavy".

82CardsGrad

Yup... I had read about Reno and clearly knew of the Vegas area growth...
It's actually consistent throught the West and Southwest. From Albuquerque to Phoenix/Tucson, to Vegas and Reno, up to Salt Lake City and Boise - the path of progress has been strong and steady, and is predicted to remain that way for some time to come...
There was a terrific study that was done approx. 3 years ago by some think-tank out of DC. It highlighted the developing 10 "Megapolises"...
One of them was the Phoenix-Tucson metro area, which they said by 2020 would be one major metroplex. Same for L.A.-Vegas, Birmingham, AL to Raliegh-Durham, NC and others I can't recall at the moment...
The general gist was that the Northeast will continue to see populations decrease over the next decade or two, while the Southeast, Southwest, including Boise would see steady and strong growth.