Consumers who get their loans through brokers typically pay more than those who obtain them directly from the lender, claims a study prepared for the Department of Housing and Urban Development. The study by Susan Woodward, a former chief economist for HUD, says total fees on $105,000 brokered loans were $4,000, compared with $3,150 for loans made directly by the lender.
As we have always indicated it makes sense to shop around for the best quote. Our personal belief is the big "brand-name" lenders are not as competitive as the smaller, lesser-known-shops, which brokers have access to but you may not. The key is to have a few brokers know that they are in competition for your business, which will likely drive down the "spread" they quote. This is very similar to what you would do if you were buying a used car -- call several dealers, tell them what your interested, and ask for their best quote.
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