Closing Costs seem so confusing, how do I figure out what they will really be?

Closing Costs are an unavoidable part of any mortgage transaction.  Regardless of what you hear or see in advertisements, you will never avoid closing costs and lender fees.  One way or another you pay them. (Click for the FREE MORTGAGE REPORT and see "No Closing Costs, No Way!  The True Cost of 'No Cost', Flat Fee, and No Closing Cost Loans".)

Which is better, a Direct Lender or a Mortgage Broker?

Phrases like "Direct lender" and "Avoid the middleman" are for the most part only marketing gimmicks in the world of mortgage lending.  Such phrases are meant to lead you to believe that by dealing "direct" and cutting out a middleman your loan will cost you less.  Generally speaking, you will not save any money simply by applying with a "Direct Lender" as opposed to a Broker.

Consider the interest rate as the product, and points as the price.  Mortgage Brokers deal with a variety of lenders and get their products (rates) at a wholesale price from lenders.  This wholesale price allows the Broker to offer the same rates at the same (or better) prices as the direct lender, and still earn a profit.  The only real functional difference between the two is that a Broker has to have the processed application underwritten and approved by a lender, and have the lender's money sent to the closing.  Whereas a direct lender might do the underwriting themselves and use a line of credit to provide funds, and then sell the loan after the closing.

As it relates to the borrower and the costs involved, there is no real benefit to limiting oneself to direct lenders.  Contrary to popular belief, typically there is no additional cost associated with the services of a reputable Broker.  You can pay more than you have to with a direct lender just as easily as you can with a broker.  The only way to avoid paying more than you have to is to do your homework and compare rates and fees.

So which of the two is better has little to do with what they are called and is entirely up to you.  What matters is not whether or not your mortgage provider is a Direct Lender or a Broker, but which is offering you a fair rate at a reasonable cost, along with the level of professional service you expect and require to handle your transaction quickly and efficiently.