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Old 08-20-2008, 09:38 PM
 
Location: Cary, NC
1,036 posts, read 3,628,866 times
Reputation: 503

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KeithG- just remember, the customer is always right. If they want a higher interest rate....

I know, its hard to explain to some as there is zero financial education in our school system. There are enough good customers that appreciate you taking the time and every once in a while they do reffer people because of it.
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Old 08-21-2008, 05:46 PM
 
Location: Plano, Texas
1,676 posts, read 6,336,323 times
Reputation: 684
Quote:
Originally Posted by bale002 View Post
This issue has probably been discussed before on this forum, but can members review for me or indicate a thread discussing the pros and cons of seeking a mortgage directly from a bank and through a mortgage company/broker.

From my research so far, in terms of rates, it seems that banks are currently offering 6.75% fixed, while I have seen competing offers around 6.125% and everything in between, and on the high end BoA at around 7%.

But I am worried about hidden costs with mortgage companies/brokers.

To what extent can one negotiate advertised rates with banks? My average credit score is around 770, no debt, possibly seeking a $200-220k mortgage on a first-home purchase, 20% down, annual income from self-employment around six figures.

Is it better to deal with a bank with which I already have checking, savings, investment and/or credit accounts or go to a totally different bank?

Is it better to walk into a bank branch and speak to a bank loan officer than to fill-out on online application?

Thanks.
You state above that you are concerned about hidden costs with a broker. I am a Certified Mortgage Planner that works for a direct bank but i can also work as a broker. Brokers get a bad name in todays market. Alot of people blame brokers for the problems we are having; however, a broker has never approved a loan. As a broker we submit a loan to a lender and they decide to approve or not. But as a broker, we must disclose all fees associated with the loan and we also must disclose all money we are making. So a broker cannot hide any fees. Now, when i send a loan through my own bank, fees that i am making can be hidden from the client. So, when you go through a broker everything can and will be disclosed but when going through a direct bank things can be hidden from you.
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Old 08-21-2008, 06:23 PM
 
Location: Spring Hill, Florida
58 posts, read 183,202 times
Reputation: 18
Victor is right. I finally got my point across to my client and he saw the light, so to speak. The bank can give us a par rate and we can pass that exact same par rate to the borrower but only if we make a little on the back-end ... by raising the APR and your monthly payment by X amount of dollars. Howsoever, it is my understanding that the Guv of N.C. just passed a law to ban YSP from all loans done in N.C. Good God man, all he's gonna do is price out those people who ain't got the cash from ever buying a home ... in N.C. anyway. Well, there goes the neighborhood ... yup now only the bankers can make back-end money ... in N.C. anyway ... and who are they helping?

Keith G.
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Old 08-21-2008, 06:28 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,100,301 times
Reputation: 1008
They're helping the banks not the borrowers.

Studies have shown that banks charge 1-2% higher than brokers.

The rich get richer!

Quote:
Originally Posted by Keith G View Post
Victor is right. I finally got my point across to my client and he saw the light, so to speak. The bank can give us a par rate and we can pass that exact same par rate to the borrower but only if we make a little on the back-end ... by raising the APR and your monthly payment by X amount of dollars. Howsoever, it is my understanding that the Guv of N.C. just passed a law to ban YSP from all loans done in N.C. Good God man, all he's gonna do is price out those people who ain't got the cash from ever buying a home ... in N.C. anyway. Well, there goes the neighborhood ... yup now only the bankers can make back-end money ... in N.C. anyway ... and who are they helping?

Keith G.
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Old 08-21-2008, 07:27 PM
 
Location: Cary, NC
1,036 posts, read 3,628,866 times
Reputation: 503
The rule does not ban YSP in NC though. First it only applies to high-cost loans, which sets off all sorts of additional requirements (like no stated income).

It also does not ban YSP, we just can not earn a % from a lender... it has to be a flat fee. Much like HELOCs work at most brokers, we cna earn a flat $500 or $1000 for doing the loan but we can not make a % of the loan amount or a fee that varies by loan terms.

It is not a bad rule, high-cost loans should have additioanl oversight and regulation because of their nature. As long as it applies to all originators and its a fair flat fee then I have no problem with it.... what worries me is when different originators have different regulations and requirements.

Just as not brokers are licensed in many states, and bankers are not. Brokers disclose all compensation but bankers can hide their commissions. Its unfair and deceptive to borrowers.
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Old 08-21-2008, 07:29 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,100,301 times
Reputation: 1008
So it only applies to the rate spread loans?
If we go over th 5% mark basically...

Quote:
Originally Posted by rcarrillo View Post
The rule does not ban YSP in NC though. First it only applies to high-cost loans, which sets off all sorts of additional requirements (like no stated income).

It also does not ban YSP, we just can not earn a % from a lender... it has to be a flat fee. Much like HELOCs work at most brokers, we cna earn a flat $500 or $1000 for doing the loan but we can not make a % of the loan amount or a fee that varies by loan terms.

It is not a bad rule, high-cost loans should have additioanl oversight and regulation because of their nature. As long as it applies to all originators and its a fair flat fee then I have no problem with it.... what worries me is when different originators have different regulations and requirements.

Just as not brokers are licensed in many states, and bankers are not. Brokers disclose all compensation but bankers can hide their commissions. Its unfair and deceptive to borrowers.
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Old 08-21-2008, 07:36 PM
 
Location: Cary, NC
1,036 posts, read 3,628,866 times
Reputation: 503
Quote:
Originally Posted by renriq02 View Post
So it only applies to the rate spread loans?
If we go over th 5% mark basically...
Yep. NCAMP sent out an email about this last week.... I will DM you the text. I highly suggest joining up, its a small cost and keeps you in the know about new laws being cosidered and changes in the market.


One thing people didn't notice, NC just raised the credit score and education hours required to obtain a loan officer license. The credit score one took effect this summer, the new hours in September. A great step to weed out more people looking to enter the business just for the money.

Going back to the OP. This is another difference between bankers and brokers. Only brokers are required to take a course, pass an exam and submit to a SBI and FBI background and credit check. We are registered and licensed with the state as brokers, bankers are not. Our fees are regulated and supervised, bankers again are not.

Brokers are consistently having to disclose far more than bankers (I do both so I can say so from experience) but brokers still get the rep for being less educated and more expensive. It all depends on whom you work with, both industries have their share of bad players. Hopefully these rules get rid of a few more.
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Old 08-21-2008, 07:43 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,100,301 times
Reputation: 1008
Well this definitely looks like a good time to go headfirst into commercial loans.
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Old 08-22-2008, 07:47 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,595,721 times
Reputation: 249
you could also get certified to do reverse mortgages. baby boomers start retiring next year. find an indymac rep and see about getting involved with that.
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Old 08-22-2008, 05:46 PM
 
Location: Plano, Texas
1,676 posts, read 6,336,323 times
Reputation: 684
Something that amazes me is that people always want to find someone to do their loan for less. Who is the cheapest. Is that how you would advise someone to hire a lawyer, or a doctor or a dentist? Of course not, so why do some many people do this when acquiring a mortgage? Your home will most likely be the biggest investment you ever make. Why would you want to find the person that will do it for less then anyone else and entrust that person to give you the best mortgage advise for your biggest purchase. Look for a professional, there are plenty around. Yes, they will make money, most professional mortgage advisors look to make between 1 to 2% of the loan amount, which by the way is less then your realtor will make. But when you work with a professional, they will give you advice on which mortgage is most suitable for your family based on the amount of other debt you have, how long you plan on staying in the home, what other investments you have such as 401k, etc.., and what your credit is like. There is much more that goes into getting a proper mortgage then what is your rate and what is your cost.
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