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Comment by nostromo | Hacker News Reader

In theory you should get a better deal working directly with lenders.

In practice? For me it was the opposite. I worked with a mortgage broker (a professional, not a website) and I got a much better deal.

For startup folks, this is even more common. My current mortgage holder originally denied me credit completely (they were scared of someone working at a startup). My broker knew exactly how to work around this issue, asked me to sign a few forms, made a few calls, and then the same bank came back with the best offer.

Your best bet is to get a few quotes directly, but then to work with a mortgage broker to see if they can beat your best offer -- quite often they can.

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I'll bite: how did they work around the issue?

I don't know all of the details, but my broker knew the right person to call at the bank. They asked for some details on the company, which I provided, and then viola, it was approved with a great rate.

This is the kind of thing that's impossible to do getting quotes from a website, or talking to someone that works at your local branch. It's a matter of knowing how to package your application and then being able to speak with someone that actually has some ability to make the decision.

That always made me a little nervous. We have all these new safeguards in place around mortgages since the last crisis, and I wonder how things like this are ok to leave up to back-channel conversations.

Not knocking you or your situation specifically, but in general if someone is not a great risk, but that goes away if they get someone to make the right phone calls, is that a good thing in the big picture?

Not judging, just posing the question.

It sounds like the risk wasn't quantified correctly in the first place. Being a highly-skilled tech worker, working for a well-funded startup should have nearly no impact on the probability of you being able to pay your mortgage. Even if the thing collapses, you can have another job within a week. If the whole industry collapses in a dotcom bust style, established companies will be heavily impacted as well.

I had a similar situation when buying my house. Tech employee, fairly high percentage of compensation was stock options (we'd gone public ~18 months prior) and the standard route wasn't working (as there was no place to put the variable/incentive comp).

Mortgage broker got it done very easily (albeit with Countrywide, not exactly known for the strictest of standards :) ).

Never missed or late on a payment on that loan.

Different companies offer different products. Some lenders were doing 90% LTV up to 800k, some were doing it up to $1m. Some lenders might give 30 year fixed rate loans on certain high LTV loans, others might only do ARMs.

Every business makes a calculation about what kind of business it wants to do.

I did not use a mortgage broker when buying a house. My reasoning was that they compete on price enough that the interest rates aren't worth shopping around for. The PRODUCTS may be. If I was doing a bridge loan to buy a 2nd house, I might shop around. If I'm doing a straight-up financed purchase on 2 stable well-documented incomes, I'm probably going to get about the same product and rate no matter what bank I use.

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