Our search for a mortgage broker

Our search for a mortgage broker began with a recommendation from our real estate agent. We spent most of our time with this gentleman, but he never really seemed to listen to us or to work within the parameters of what we were trying to do. He seemed more interested in the easier (read: higher commission) way of getting us under contract.

In the end, we had a mad dash in the last few weeks where we switched over to a friend of ours that was able to offer us a much better deal. If we do not pay anything early, then we’d save about $12,000, and needed about $500 less up front. Spending the extra $100 or so a month towards principal will mean that we save even more than that.

The deal that we went with was a modified 80/15/5, which basically means that you put 5% of the purchase price up front as a down payment, and take out two mortgages. One mortgage is for 80% of the purchase price, and the other mortgage (at a higher rate) is for 15% of the purchase price. This makes it so that you can avoid private mortgage insurance. Unlike interest, PMI is not tax deductible. Our deal was modified in that we put down 16% of the purchase price, so we only had a 4% mortgage at a higher rate which we should be able to pay off in a few years.

We were very happy with who we chose to be our mortgage broker in the end. He was able to help us, we were able to help him, and if we refinance in a few years he will be sure to get our business. He even floated my name around some friends of his looking to hire somebody in my line of work, which if I decide to pursue any of those opportunities could give me half again my current salary. However, I am happy where I am at and am currently living within my means, so I hope to stay where I am for a few more years. I am sure that our first broker would not have even thought that I was making a little less than the work I did would seem to call for.