Mortgage broker vs. direct lenders?
We are in contract on a house. We’ve been working with a local mortgage broker recommended by my RE agent. She’s been very helpful to us in recommending types of loans, organizing our paperwork, and getting us pre-approved. She also took care of getting us a HELOC that we needed (without getting paid for that service, I think).
I’ve been doing some rate shopping today. It looks like we could get a better deal through a direct lender than with our mortgage broker.
The broker quoted us a 7/1 jumbo ARM at 6.125% and a 30-yr fixed jumbo at 7.125%, both with 1 point. I’ve spoken with Countrywide and Quicken Loans, and they are quoting me roughly 6% on the 7/1 and 7% on the 30-yr fixed, both with 0 points.
So, two questions:
1) I’m feeling guilty about going with one of the other lenders after this mortgage broker has been so helpful to us. What do you think?
2) Why the difference in rates between the lenders and the broker? Is there a catch?
Update, Thursday 3/6.
Thanks, everyone, for the responses.
I’ve done a little more digging, and — surprise! well, not really — the rate my mortgage broker was quoting was actually pretty good. Turns out, she was qualifying us for essentially a “stated income” loan, because we won’t sell our current house till after we’ve closed on the new one. So, all those lower rates I heard from other lenders wouldn’t actually be available to us.
Lessons learned? 1) My mortgage broker really should have been more clear in explaining the circumstances of our loan; 2) I should have called her as soon as I saw lower rates and asked why hers were higher; 3) lots of loans sound good at first, until you really start digging into the details.