Our question is I'm currently debating and doing research as to which route is best to go with locally for mortgages, broker, or local bank.
So it was mentioned to watch out for not being overcharged with broker fees itself. How can I tell when overcharged fees are taking place? So here's how you can make sure that you're not being overcharged by a lender.
The simple answer is you really can't because all lenders are going to charge different things. Some lenders have fees for underwriting, some lenders don't, some lenders have fees for processing or application fees and other lenders don't.
The only way that you can figure out what's going to be the best solution for you is to shop with kind of an apples to apples comparison. So for instance, let's say lender A charges $0 in fees. When you now shop with lender B, you need to say to lender B, Hey, I need you to show me what this would look like with $0 in fees.
That's going to let you compare the rate side-by-side to see which one is actually better and vice versa. If lender A charges $1,000 in fees, you need to go to a lender B and say, Hey, show me your rate with $1,000 in fees.
So what the lenders will do is they'll have their fees in there and they'll be able to adjust the rate to either charge extra or give you a credit so that you can see a fair comparison side by side. This is the best way to shop because I see people do this wrong all the time.
They go and shop lender A, B and C, and all they do is look at the rate. But lender A might have a lower rate, but they're charging you double what lender B is, and lender B might have a cheaper rate if they're matching the same costs.
Match the cost and compare the rates
So you need to match the costs or have the lenders match the costs, and then you can compare the rates side by side. So that's the best way to tell what your best option is going to be looking with any type of lender, a broker, bank, credit union, or a direct lender.
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