Mortgage Brokers vs Mortgage Bankers in NYC

[scotty]

Hey guys, I've recently submitted an offer and I just got notice that it's been accepted. Meanwhile, do you work with any mortgage broker that can shop around and find the best rate? I got 4.375% for now, but wonder if there is a lower rate.

[aslan]

I think you’ll generally get a better deal by going with a big bank direct these days FYI. Defer to any mortgage specialists out there on what fees mortgage brokers take in the middle, and whether the ability to shop between banks is valuable or not.

[TMG]

I think that brokers can compete favorably on conforming loans ($453,100 or less).

In the Jumbo space the big banks will offer better rates.

Always best to check at least 2 sources.

Also of note:

* Brokers don’t have as much flexibility with exceptions to guidelines should the need arise.
* Additionally, the big banks will be more vigilant in keeping your data secure. Internet security and keeping Non Public information (NPI) private is a big deal at banks. Brokers may not have the resources / policies / training to be as vigilant with customer data.

[scotty]

Thanks for the answer TMG! I've always wondered about that. I heard that mortgage brokers were actually quite popular before the 2007-2008 Financial Crisis when there was a plethora of mortgage products to choose from and everyone was getting a mortgage. But it seems after the recession a lot of these mortgage brokers ended up moving to the big banks where they work today as mortgage bankers (though I hear still on commission).

I'm frankly surprised that mortgage brokers still exist, or at least exist in NYC. It seems to make more sense that everyone would just go direct to their bank? Who actually goes to a mortgage broker as a first logical step?

Though what about online upstarts like SoFi etc. who are lending and trying to make inroads? Are they generally competitive would you say?

[lower_nyc]

I think you’ll generally get a better deal by going with a big bank direct these days FYI. Defer to any mortgage specialists out there on what fees mortgage brokers take in the middle, and whether the ability to shop between banks is valuable or not.

Do you have a private client relationship with any of the big banks? Many large banks like Chase and Bank of America offer interest rate reductions for their private clients.

[lower_nyc]

Do you have a private client relationship with any of the big banks? Many large banks like Chase and Bank of America offer interest rate reductions for their private clients.

More specifically, here is what Citi recently sent me in the mail:

Balance:
$200k - $999k - 1/4% off interest rate
$1m+ - 3/8% off interest rate