Need advice on using a mortgage broker vs. going to the bank directly?

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A question by Nlyz :  

My friend told me that mortgage brokers are free to use, and that the bank pays them once a deal is reached. Is this true? Is it any more expensive to use a mortgage broker vs. going to the bank directly? My husband has a bit of a credit challenged past, so from what i’ve been told, mortgage brokers give you a better chance at securing a mortgage. We’ve been told by banks that we’d require a co-signer, which is not available to us.

Bottom line, if we use a mortgage broker, is it going to cost us anything, and if so, would we be better off trying to get things done with the bank directly. Thanks ?


Provide a response using the comment section. After review we will update the answers.

“I always recommend my clients contact a direct lender (banks, etc.) and a mortgage broker. Mortgage brokers have access to many different loan products whereas a bank generally only offers their loan products. The fees are usually about the same as what a bank charges. You should pay no more than 1% loan origination fee, plus various other charges the lender charges (credit report, appraisal, etc.). The mortgage broker is paid by the lender for offering their loan products and that is where a good portion of their fees come from. I recommend you and your husband pull all three of your credit reports. Go over them with a fine tooth comb and make sure everything (even prior addresses) is correct. Make sure to dispute anything that is incorrect or inaccurate in writing (not online). If there are any unpaid bills or charge-offs on your credit, start getting to work on paying these bills. Anything that is more than 7 years old – DO NOT PAY – these should be off your report so dispute those accounts. Talk to a mortgage broker – they can help you and you may be pleasantly surprised that you can get a mortgage.”


“A broker isn’t free. Their fee is part of your closing costs and/or a slightly higher interest rate. Loans for the credit-challenged may be impossible in today’s market..they may not charge you upfront, but fees they charge the bank may be in your closing costs, and if you dont have the seller pay them you will have to. from my experience banks (or credit unions) are better to deal with. my hubby has a low credit score too. just go to a”


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