Is there any reason to have a mortgage broker when refinancing with a specific company?

If I’m refinancing a residential home, and already know exactly which company I will use to obtain a mortgage from (and at which rate), is there any value in working with an independent mortgage broker?

I have seen estimates of ~1% of mortgage amount as cost of engaging a broker. So what do I get for that price other than the no-longer-necessary-process-of-shopping-for-best-mortgage (which I did myself already)?

3 thoughts on “Is there any reason to have a mortgage broker when refinancing with a specific company?

  1. TTT

    When I refinanced my condo last year my bank could not match the rate and fees that my broker offered so I went with the broker. Coincidentally, 2 months after I closed, my mortgage was transferred to my bank! (This was a pleasant surprise to me.) This is obviously anecdotal; I’m sure some people have the exact opposite happen where the broker charges more.

    The main benefits of a broker are:

    1. They do comparison shopping for you.
    2. In my opinion the brokers generally seem to have more experienced and knowledgeable loan officers. They work with many different banks and processes every day so they really know the tricks of the trade.
    3. Brokers are not a true middle-man scenario which would naturally incur higher fees. For example, loan officer commissions don’t need to be paid back to the issuing bank. The broker’s LO is instead acting like another sales arm for the bank, but with less overhead from the bank’s point of view. Therefore high volume brokers may be willing to turn a smaller profit and could actually end up being cheaper, like in my case.
  2. Simon B

    If you know what mortgage product you want, and you know who you want it from, then there’s very little point in engaging a broker. They will end up as a pointless intermediary between you and the mortgage company.

    If the mortgage company wants to ask a question (for instance to check your ability to pay), then they would have to ask the broker, the broker would ask you, you tell the broker the answer, then the broker would tell them. If there’s a follow on (for instance if they want some documentary evidence of something), then the whole process goes round again.

    And for all that getting in the way of communication, the broker will expect a fee from you, or a commission from the bank (which will be factored into the mortgage cost).

  3. Rupert Morrish

    Depending on the situation, the mortgage broker may still end up getting you a better rate. Last time we re-fixed our mortgages, I spoke to both the broker and our personal banker, and the broker had the better rate.

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