Just paid a broker $500 for a commercial loan and I'm not sure it was worth it

I needed a loan for a small apartment building I manage, about $250k. My bank gave me a quote, but a broker friend said he could find a better rate. He charged me a $500 flat fee upfront to shop around. He did get me a rate that was 0.25% lower than my bank's offer, which saves me some money over the loan's life. But honestly, the whole process felt slow and I had to explain my whole situation twice, once to him and once to the lender he found. The bank guy I talked to first was way faster to get back to me. Now I'm looking at the numbers and wondering if the small savings is worth the extra hassle and that upfront cost. For those who've used brokers, is the fee upfront normal, or should I have looked for one that only gets paid if the deal closes?

3 comments

3 Comments

evan_nguyen2315d ago

That "explain my whole situation twice" part is the hidden cost people forget about. Your time has value too.

the_evan15d ago

Honestly the real question is if that 0.25% saving beats what you could've earned investing that $500 fee instead lol

the_kai1d ago

Right? And that's assuming you even get the 0.25% rate. If the market does well, that $500 could grow way more sitting in an index fund.