Mortgage Broker Question

Do you really need one? DH and I are refinancing so we can get me on the deed and mortgage (yes, we have confirmed this is the only way to do this). We made the initial purchase and refinanced once before this without the help of a broker from an outside brokerage firm. This time a colleague of mine is suggesting we use one.

Any pros/cons that you guys can share? TIA.

ETA: Sorry if I was unclear - We already went through the broker and we were approved this morning. What I am struggling with is that our last two mortgages had no points and now, because of the use of a broker, we are going to have 1 point on the mortgage and the rate he quoted seems slightly higher than what is published on bankrate.com.

So I am basically trying to decide if I want to complete the transaction through the broker or just go it alone as we have before.

I personally like to use a broker, first of all it saves you some of the trouble. Not only that but RIGHT NOW its sooo hard to get a loan and yesterday just made it harder. infact, theres alot of banks at this moment that wont even give a loan for now. They even said on the news last night that many private lenders and banks have put a stop on giving student loans for a while until this all gets worked out. So there will be alot of work that needs to be done now. Not only that but now they are alot more strict than they ever were. If you have 1 late payment they can deny you EVEN if you have good credit. I even read this article yesterday, i can post it for you if you want but this broker was saying how his client was putting 1.2 million down payment on a home, had good credit, good income but bc of 1 late payment about 2 years ago they denied him. Now they will look for any excuse to say no to you. Its a big headache, going through it now.

Also they lowered the debt to income ratio. It used to be 57% now its 40%. What this means is that they take all your payments such as CC's, school loans, cary payments, bills, and what you would pay for the mortgage, and it cant exceed 40% of your income. The article spoke about ppl theyve had to deny with 45% which normally used to be great but now they have to deny them.

Well I already went through the broker and we were approved this morning, even after everythign yesterday.

The issue for me is, our last two mortgages had no points and now, because of the use of a broker, we are going to have 1 point on the mortgage and the rate he quoted seems slightly higher than what is published on bankrate.com.

So I am basically trying to decide if I want to complete the transaction through the broker or just go it alone as we have before.

also wanted to add that i had my dad do everything when i refinanced a while ago. He does this all the time so worked out great. But even now its just too much trouble for him to have to do it.

My suggestion is to go with bank of american, they are one of the few banks, only 1 of 3 whom are doing well, infact they are doing the best at the moment so your best bet to get a loan would be through them. Good luck.

Here is the article

NEW YORK (CNNMoney.com) -- Wall Street's meltdown has put the squeeze on all sorts of lending, and home loans are no exception. Now, even some very well-qualified home buyers are getting turned down for mortgages.

'A lot of good, well-qualified people are being turned away for no good reason,' said Mark Savitt, president of the National Association of Mortgage Brokers and a mortgage broker in West Virginia. 'The wheels are coming to a grinding halt.'

Sometimes the rejections seem completely inexplicable. Long Island, N.Y.-based mortgage broker Bob Moulton had one client with substantial income and assets who planned to put down $1.2 million on a house selling for $2.2 million. For this borrower, a mortgage should have been a snap. But it wasn't.

The hitch: The buyer was a few days late with a single mortgage payment last year when he was away on vacation. That lowered his credit score to 679, which is the reason the lender cited when it denied his loan.

'Just a little ding on his credit report, one late payment a year-and-a-half ago,' said Moulton. 'Everything else was fine.'

Higher rates
Another example comes from Savitt. One of his clients was buying a home for $205,000, putting down 20%. The buyer had an excellent credit score in the mid-700s, and the house was appraised at a little higher than the sale price.

The problem here: The borrower's debt to income ratio would be at about 45 - slightly higher than what most banks like to see, but by no means excessive. And his other risk factors were great.

'The bank turned it down over excessive debt ratio,' said Savitt. 'That's crazy.'

And higher interest rates are making it even harder for borrowers to get a loan. The 30-year fixed rate has shot up in the wake of the financial crisis - to 6.09%, compared with 5.78% last week - making monthly mortgage payments higher as well. That's raising the debt to income ratio for most borrowers, which means more will have their loan applications rejected.

'

It used to be that if most of a borrower's qualifications were quite strong - income, assets, credit score and the value of the home itself - lenders would use their judgment to make exceptions if one factor was a bit weak.

A lender might accept a less than stellar credit score, for example, if the borrower was making a big down payment, or forgive a modest income if the borrower's bank account was fat enough.

Not any more, says Alan Rosenbaum, president of New York City mortgage broker GuardHill Finance.

'There are no exceptions today,' said Rosenbaum. 'If an application does not meet each of the guidelines - and those guidelines themselves have gotten more strict - it's denied.'

That means many more people simply no longer qualify for a mortgage.

A numbers game
'I get as many phone calls as I got two years ago,' said broker George Hanzimanolis, of Bankers First Mortgage in Pennsylvania, 'but I bet you 40% of the people calling in, we can't do anything for, versus 5% a year ago.'

And Hanzimanolis say it's gotten worse in the last few weeks. One recent client who had excellent assets and income wanted to refinance his first and second mortgages. The house was valued at $1.6 million, and he was looking for a $1.2 million loan. That's an excellent loan-to-value ratio of 75%; the banks like it to be no more than 80%.

But these days many lenders are anticipating that home prices will continue to fall, so they're automatically discounting every home's appraised value by 10%.

That dropped the value of the borrower's home to $1.44 million, which put him over the 80% loan-to-value ratio. So the loan was turned down.

Things like that make brokering mortgage loans today a struggle, according to Moulton.

'Nothing is making sense. Everything is torture right now,' he said. 'We're getting things done but it takes enormous effort. You think a deal is vanilla and it turns out to be rocky road.'

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Posted by JB1122

Well I already went through the broker and we were approved this morning, even after everythign yesterday.

The issue for me is, our last two mortgages had no points and now, because of the use of a broker, we are going to have 1 point on the mortgage and the rate he quoted seems slightly higher than what is published on bankrate.com.

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then bring that up to him. I had one place try to charge me insane closing fee's and we said no. I know what it costs for closing fee's on an apt and they were giving us closing fee's that would be on a house. So if you have a problem with anything let them know. My dad flipped out on them and even threw his papers at the guy and said no. A few mins later they came back with $5k off the closing fees

CONGRATULATIONS btw, that is great news. Especially at this moment to get that. We also just got approved and are shocked lol

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Posted by Espo22

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Posted by JB1122

Well I already went through the broker and we were approved this morning, even after everythign yesterday.

The issue for me is, our last two mortgages had no points and now, because of the use of a broker, we are going to have 1 point on the mortgage and the rate he quoted seems slightly higher than what is published on bankrate.com.

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then bring that up to him. I had one place try to charge me insane closing fee's and we said no. I know what it costs for closing fee's on an apt and they were giving us closing fee's that would be on a house. So if you have a problem with anything let them know. My dad flipped out on them and even threw his papers at the guy and said no. A few mins later they came back with $5k off the closing fees

CONGRATULATIONS btw, that is great news. Especially at this moment to get that. We also just got approved and are shocked lol

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LOL sounds exactly like something my Dad would do.

Did you investigate ING mortgages at all? We're only planning to stay in our current house for a maxmium of five more years (we've already been there 6). They do adjustable rate mortgages and their 5/1 ARM is at 5.25%. I've read up on them - the reviews seem to indicate they have the best rates (no surprise given their high return savings accounts) but that their customer service is really subpar.

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Posted by JB1122

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Posted by Espo22

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Posted by JB1122

Well I already went through the broker and we were approved this morning, even after everythign yesterday.

The issue for me is, our last two mortgages had no points and now, because of the use of a broker, we are going to have 1 point on the mortgage and the rate he quoted seems slightly higher than what is published on bankrate.com.

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then bring that up to him. I had one place try to charge me insane closing fee's and we said no. I know what it costs for closing fee's on an apt and they were giving us closing fee's that would be on a house. So if you have a problem with anything let them know. My dad flipped out on them and even threw his papers at the guy and said no. A few mins later they came back with $5k off the closing fees

CONGRATULATIONS btw, that is great news. Especially at this moment to get that. We also just got approved and are shocked lol

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LOL sounds exactly like something my Dad would do.

Did you investigate ING mortgages at all? We're only planning to stay in our current house for a maxmium of five more years (we've already been there 6). They do adjustable rate mortgages and their 5/1 ARM is at 5.25%. I've read up on them - the reviews seem to indicate they have the best rates (no surprise given their high return savings accounts) but that their customer service is really subpar.

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yeah hes great to bring in for negotiations. And like i said before, i have used my dad instead of a broker in the past. It worked out but this time there was just too much work and there were other things he had to take care of, right now he is overseas trying to take care of a few things for my grandmother. But he knows our mortgage broker very well, hes friends with him and our broker was even at our wedding. So my dad has been behind alot of this and helping out.

We did get a fixed rate, but we talked about alot of different options and were told different things we could do. Sorry you dont like the customer service, i know what you mean though. We went through about 3-4 brokers and some were a**holes. The broker we are using now had changed companies and my dad couldnt find his cell number and he finally found him thank god.