The Real Estate market continues to improve with homes values increasing roughly 8% on average in most of the coastal areas. This increased value as allow many people to refinance their homes and obtain much lower mortgage rates. With that said I have noticed an increase of questions addressing their mortgage rate on a loan they are about to get and recently closed loans. Nearly 50% of the inquires, that I have address, have mortgage rates that are much higher than the wholesale mortgage at the time the loan was structured. So what does that mean?
Lenders all make money on every loan that they do, we all know that. The question is how much money you are paying for your loan. Yes the A.R.P. can show you the amount that you are paying for your loan but this figure is often manipulated. You should be able to get a rate quote from any lender without them running your credit report providing you know what your fico score is. Also your rate will be subject to your personal information once reviewed. Once you have a few rate quotes then you will have an idea if you are dealing with a reasonable priced mortgage company.
The larger mortgage companies are the Banks themselves. Do not fool yourself, Banks today function much like a Broker. If your Bank Loan Officer says that they have DU approval on your file, most will not tell you, then they plan to sell the note once created. They will service the loan once created but servicing and owning a note are two different things. For those that do not know, service is much like a property manager when you rent a place to live. You deal with the property manager and not the owner. A servicer and a property manager are similar in terms of function to their client, client as in property owner or note owner. You can also look closely as your paperwork and loan docs and see if there is anything that states the Lender can sale your loan after you sign your loan docs. This is that same thing a Mortgage Broker will do.
This is why I always say to get a mortgage quote from a Bank, Direct Lender and a Mortgage Broker as the cost will vary widely. Look closely at your note rate, loan fees to close and your monthly payment. Keep in mind that Brokers are required to show how much they will make on a loan. Direct Lenders and Banks are not required to show how much they will make on a loan. This is because Lenders both depository and non depository that fund loans using their own funds do not have to show their fees, imagine that! Personally I find it shocking that a Bank, the place most people trust, does not have to show their fees but it is what it is.
The Feds have made many changes to the Mortgage Industry over the past four years but clearly, as indicated above, the industry favors the larger mortgage operations. Today roughly 70% of the small mortgage brokerage companies have closed down just as many of the Banks over the past 10 years. When looking for mortgage companies, look for a local mortgage company in your area, check them out with the Better Business Bureau and request a mortgage rate quote. Mortgage rate quotes should always be free of charge. Frankly all consumers obtaining a new loan should never pay any upfront fees.
MN Capital of Huntington Beach offer free online rate quotes.
MN Capital –