Unlocking Savings: Why Brokers are Key to Lower Mortgage Costs

In the ever-evolving world of mortgage finance, finding the best deal is paramount for homebuyers. The 2024 Channel Study, conducted by Polygon Research for United Wholesale Mortgage and Willow Canyon Advisors, sheds new light on why working with a broker, particularly through the Third-Party Originated (TPO) channel, can be your ticket to significant savings.

Why TPO Brokers Outshine Retail Lenders

Brokers operating in the TPO channel consistently deliver better deals for their clients compared to traditional retail lenders. The study, which analyzed mortgage lending outcomes over the past 4-6 years, found that borrowers working with TPO brokers paid significantly less in upfront fees and secured slightly lower interest rates. In 2023 alone, homebuyers who chose the TPO channel saved an average of $3,500 per loan—money that stayed in their pockets rather than being spent on unnecessary costs.

But the savings don’t stop there. Over the life of a 30-year fixed-rate mortgage, borrowers who worked with TPO brokers saved an impressive $10,662 compared to those who went through retail lenders. For VA loans, the savings were even higher, with TPO clients pocketing an additional $13,432 over the life of their loan.

Brokers: The Smart Choice for Majority Minority Census Tracts

The benefits of working with a broker extend beyond just lower costs. The study also revealed that TPO brokers are making significant inroads in Majority Minority Census Tracts (MMCTs), areas where the population is predominantly made up of minorities. Although retail lenders have traditionally dominated these markets, brokers are rapidly gaining ground. In fact, from 2018 to 2023, the TPO market share in urban MMCT areas grew from 16.7% to 23.2%, a clear indicator that more and more borrowers are recognizing the value brokers bring to the table.

The Bottom Line

If you’re looking to secure a mortgage with the lowest possible costs and the best rates, working with a broker in the TPO channel is your best bet. The numbers don’t lie—brokers consistently outperform retail lenders, delivering substantial savings to their clients both upfront and over the long term.

In a market where every dollar counts, making the smart choice to work with a broker could be the decision that saves you thousands. Whether you’re buying a home or refinancing, partnering with a TPO broker is the key to unlocking significant savings and securing the best possible deal on your mortgage.