1

I live in the US and I am considering refinancing my mortgage. From what I have read, a large part of the cost of refinancing comes down to broker fees (which tend to be a percentage of the principle (~1-2%) and can be in excess of $10,000), so I am curious about the possibility of refinancing without using a broker.

What are the pros and cons of doing this? Can I really save money by not using a broker?

  • Have you contacted the current bank that is servicing your mortgage? – JTP - Apologise to Monica Mar 23 at 16:01
  • @JTP-ApologisetoMonica I haven't done that yet, no. At this point, I was looking for some general, independent advice. – Time4Tea Mar 23 at 16:07
  • Is it normal to do a refinance (or FTM even an original mortgage) through a broker? While I'm no expert, the few I've done have always been directly through the lender. – jamesqf Mar 23 at 17:07
  • @jamesqf thanks for your input. It seems that contacting our current lender is probably the first step. I had assumed a broker would be involved, because the 2-3 sites I checked about estimating refinance fees listed 'broker fees' as among the highest. I didn't think people would be paying 1-2% of principle as fees, unless there was some value to it. – Time4Tea Mar 23 at 18:13
  • @Time4Tea: I think spending money on a broker may be more of a psychological thing, akin to the way many people with dead-simple tax returns still pay someone to do them. – jamesqf Mar 24 at 17:06
3

I am an old person, and over the years I’ve had a number of rental properties as well as those that I’ve lived in. With that, came a number of refinances. When I was trying to buy rental properties and had trouble getting a mortgage from a local bank I went through a broker. Yes that came at a cost. for the home I am in now, nearly 25 years, I have refinanced five or six times. And I’ve never used a broker for this house mortgage. The bank was always willing to give me a decent rate and their lowest fees. in the end, a spreadsheet is your best friend. Or a good mortgage calculator. If you are asked to pay $10,000 more upfront but save, say $500 per month, you can see the breakeven is about 20 months. The process has been discussed here on many questions. When I am back to my desktop computer I will see if I can find a few good ones and link to them.

|improve this answer|||||
  • Thanks for your input. I guess we need to look at and compare various options: current lender, other lenders direct, brokers. – Time4Tea Mar 23 at 18:17

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.