We need to discuss some of the new gimmicks that can leave you chase-ing your tail. If anyone is charging so money they can offer you a discount of less say 1% then do not charge it to begin with. All of these deals come with many must do obligations in order to keep the special deal coming. Otherwise you will not be able to maximize the discount. So using our common sense if you over charge your client then you will have money to offer a discount, rebate, or even allow your client to apply this credit to their principle balance. So why not simply offer the discount in a fixed rate deal and not require your client to jump through hoops? Or better yet if you give the cashier at your favorite ice cream stand $1.01 for an ice cream cone that cost $1.00 they can give you back $0.01 and you should feel good for this. Doesn’t that good great!!!
This is a home mortgage that we are discussing here and it is serious and should not be filled with catchy gimmicks, slogans, or any other nonsense. All of this stuff cost money and that’s right, you will pay if you fall for any of it. So in order to find a fair deal you need to get more than one real Good Faith Offer. Do not settle for an estimated closing sheet, fees breakdown sheet or any other miscellaneous fees breakdown sheet. It must be an actual Initial Fees Sheet and Good Faith Estimate. These are basically a one way contract offer to you the client. These are real figures and not estimates that always seem to change when you go to sign your docs. Yes there are some fees that are impossible to zero in on such as days of prepay interest and existing lender payoff fees but there rest of the fees can be finalized if your disclosures are done correctly from the beginning.
Once the L/O that you are dealing with knows that you are comparing Initial Fee Sheets and Good Faith Estimates then DO NOT send them the other L/O’s offer. Simply ask them to give you their best offer and you will know if you are dealing with a creditable L/O or not. It is important to ask questions about the I.F.S. and GFE if you do not understand.
Your real concerns are this, what is the actual cost of your new loan. I am not just speaking about the fees to obtain the loan but rather the fees and the monthly payments. This is where you the borrower need to begin to make your first decision as this is subjective to each of us as we all have different needs. For example, some people have little to put down but can afford higher monthly payments. Others have a lot to put down but can not afford high monthly payments. So this is subjective to each of us. Do not forget to stay out of the A.P.R. trap and focus on the actual cost monthly and fees. If you think the deal through then the right deal will present itself to you.