What's negotiable when getting a mortgage? (loan officer, interest rate, real estate, credit report)

[Michie1]

Was wondering what exactly is negotiable when getting a mortgage from a broker? We are buying a $260,000 home and are putting down $85,000. Our FICO score is 810. Any and all help would be appreciated. Thanks, ~M~

[brokerdave]

expect the best rate, assuming your income qualifies you

[kinkytoes]

Ask your rep to pay down the interest for you.
They may throw in a 1/4 point or a 1/2 or even a point for free.
Ask if they will refund any of the fees or discount any of the fees.

[VictorBurek]

There is 2 ways the broker or the banker will make money, you pay points or the lender pays yield spread. the higher your interest rate, the more money the lender will pay the broker or banker you are working with. A par rate means that the lender does not pay any money to the broker. If you want a par rate, you will have to pay all the closing costs and 1 point origination. Today that rate is 5.625%, if you dont want to pay the point, they can increase your rate by about a .25 to 5.875% and the lender will pay the broker or banker 1 point. Here is a good question for you, do you want the person you are working with to make money? If you want to find the cheapest person to handle your $260,000 investment, i wish you luck. You will get what you pay for. It sure seems like everyone always wants to find someone who is the cheapest in doing the loan, but i bet if you need an attorney, or a doctor you wouldnt do the same. Keep in mind, do you think your employer could find someone to do your job for less money, i bet they could. But right now, i would also bet you are thinking that you do the job better then someone else so your pay is justified. It is the same when working with someone to secure your financing. I am in the Dallas area, and let me give you a good analogy. The Dallas Cowboys signed Tony Romo last year to a contract for about 70 million dollars. Dont you think they could have found someone else to play quarter back for less money? I bet if they put an ad in the paper and said they are hiring a quarterback and paying $100,000 per year, there would be a line of people wanting that job. So, why did they pay him so much money.... You get what you pay for.

[Michie1]

Please understand I'm not against the mortgage broker making a salary on the service they are providing, just want it to be fair and don't want "hidden" fees they pass on under the guise of something else~

[bentlebee]

Originally Posted by VictorBurek

There is 2 ways the broker or the banker will make money, you pay points or the lender pays yield spread. the higher your interest rate, the more money the lender will pay the broker or banker you are working with. A par rate means that the lender does not pay any money to the broker. If you want a par rate, you will have to pay all the closing costs and 1 point origination. Today that rate is 5.625%, if you dont want to pay the point, they can increase your rate by about a .25 to 5.875% and the lender will pay the broker or banker 1 point. Here is a good question for you, do you want the person you are working with to make money? If you want to find the cheapest person to handle your $260,000 investment, i wish you luck. You will get what you pay for. It sure seems like everyone always wants to find someone who is the cheapest in doing the loan, but i bet if you need an attorney, or a doctor you wouldnt do the same. Keep in mind, do you think your employer could find someone to do your job for less money, i bet they could. But right now, i would also bet you are thinking that you do the job better then someone else so your pay is justified. It is the same when working with someone to secure your financing. I am in the Dallas area, and let me give you a good analogy. The Dallas Cowboys signed Tony Romo last year to a contract for about 70 million dollars. Dont you think they could have found someone else to play quarter back for less money? I bet if they put an ad in the paper and said they are hiring a quarterback and paying $100,000 per year, there would be a line of people wanting that job. So, why did they pay him so much money.... You get what you pay for.

IMo your post is very harsh towards a person who just asks a very good question....Do you want to pay to much for a car, for clothes or whatever...so isn't the OP allowed to askit without being accused of not allowing some one to make money...what is the issue?

[sunsprit]

Originally Posted by VictorBurek

There is 2 ways the broker or the banker will make money, you pay points or the lender pays yield spread. the higher your interest rate, the more money the lender will pay the broker or banker you are working with. A par rate means that the lender does not pay any money to the broker. If you want a par rate, you will have to pay all the closing costs and 1 point origination. Today that rate is 5.625%, if you dont want to pay the point, they can increase your rate by about a .25 to 5.875% and the lender will pay the broker or banker 1 point. Here is a good question for you, do you want the person you are working with to make money? If you want to find the cheapest person to handle your $260,000 investment, i wish you luck. You will get what you pay for. It sure seems like everyone always wants to find someone who is the cheapest in doing the loan, but i bet if you need an attorney, or a doctor you wouldnt do the same. Keep in mind, do you think your employer could find someone to do your job for less money, i bet they could. But right now, i would also bet you are thinking that you do the job better then someone else so your pay is justified. It is the same when working with someone to secure your financing. I am in the Dallas area, and let me give you a good analogy. The Dallas Cowboys signed Tony Romo last year to a contract for about 70 million dollars. Dont you think they could have found someone else to play quarter back for less money? I bet if they put an ad in the paper and said they are hiring a quarterback and paying $100,000 per year, there would be a line of people wanting that job. So, why did they pay him so much money.... You get what you pay for.

Comparing professional or talent services to a brokering of someone else's money for a fee is pure BS.

If there was a huge difference in the end result for the client obtaining the mortgage in interest rate, fees, and other costs as a result of paying a higher fee for the broker service, then you might have a point.

But that's rarely the case for a well qualified borrower.

Unless the broker with a higher compensation can show you that you'll be getting lower points, waived fees, and a lower interest rate due to his higher paid services ... there's no advantage to you to pay more for those services.

It pays to shop your business around and don't hesitate to ask for a break on any aspect of the mortgage ... interest rate, points, and any other fees. Compare several quotes and calculate what will cost you the least in the term which you anticipate using the mortgage.

[VictorBurek]

Wow, cant believe the responses. I do agree the OP doesnt want to pay hidden fees or too much, but i do feel most people think that anyone can do the loan for them. That is just not true. Some loan officers are very good at what they do, some are horrible and lie and hide fees everywhere. But one advantage of working with an experienced broker is the advise they can give on different loan programs, or when you should lock a loan. I have helped many clients secure much lower rates by giving them advise on when and when not to lock. Also, an experienced broker can also make sure there are no problems with the closing. I hope the OP does not think i was accusing them of being a bad person, i wasnt. But here is a big advantage of working with a broker. A broker cannot inflate any fees, we have to show invoices. For example, when i run credit on a married couple, the credit report costs about $17.00. I will pass that fee onto my client and i am required to show the lender the actual invoice from the credit agencies. So, i cannot inflate that fee to make extra profit. However, when you work with a direct bank, they dont have to show an invoice, so if they pay $17 for a credit report, they can charge the client $50 and i have seen that many times. But the broker gets the bad name. Same with the appraisal, i have to show the lender the actural invoice and the client pays that. When you work with a bank, they might have a salaried appraiser on the payroll and the bank can say the appraisal cost anything they want. Like i said on my original post, there are 2 ways loan officers make money, client pays points and or lender pays yield spread. As a broker, the yield spread the lender is paying me is disclosed on the hud. When you work with a direct bank, the yield spread they are making is not disclosed so consumers have no idea how much money they are making. When working with a broker, you will know exactly how much they are making. And i disagree sunsprit when he or she stated comparing professional or talent services to a brokering of services is pure BS. I dont care what field or profession you are talking about, whether it is a school teacher, a stock broker, a policeman, a realtor, etc. there are some that are better then others. Some stock brokers charge a consultation fee and the better the stock broker the more they can charge. If there was a stock broker who can show you a 10 year history of making his clients let say a 25% rate of return wouldnt you be willing to pay that stock broker more money for his advice then you would pay a stock broker with a year history only showing a 10% rate of return for his clients.

[renriq02]

in this day/age there isn't 'hidden fees'.

you have to disclose EVERYTHING from the point of application to the signing of the HUD.

There are a lot of lenders who charge 'junk fees' but their rates/closing costs are still LOWER than their competitors.

A lot of competitors will say that it's wrong that they're charging you this or that....but at the end of the day you need to compare what's coming of out your pocket.
Who cares what they call it....
SHOP THE BOTTOM LINE!

[sunsprit]

Originally Posted by VictorBurek

And i disagree sunsprit when he or she stated comparing professional or talent services to a brokering of services is pure BS. I dont care what field or profession you are talking about, whether it is a school teacher, a stock broker, a policeman, a realtor, etc. there are some that are better then others. Some stock brokers charge a consultation fee and the better the stock broker the more they can charge. If there was a stock broker who can show you a 10 year history of making his clients let say a 25% rate of return wouldnt you be willing to pay that stock broker more money for his advice then you would pay a stock broker with a year history only showing a 10% rate of return for his clients.

Sorry, but you're still making apples and oranges comparisons about the cost and value of services here. A stock broker with a great track record is still no better for me than what he does now and into the unforseen future with my money. Just because they've done well for somebody else in the past doesn't mean that they will do as well for me into the future with my money at risk. This is purely a speculative investment made with my own funds.

On the other hand, when I apply for a mortgage in today's marketplace, given my credit score, loan-to-value, assets, etc., I'm buying a financial product which is available in many forms from many sources with money to lend as their business. So, who's got the best deal for me? Will it be ... as you assert ... only an expensive broker who is the one who can access the best lenders and the best rates on my behalf? Isn't it also possible that another broker with a lower fee expectation and lower overhead operation might be just as professionally capable and can shop my loan with the same price point lenders? Especially if I'm a well qualified borrower seeking a realistic and affordable loan to value ratio for my property?

You can razzle-dazzle us about all of the potential problems that are averted solely by the seasoned high paid pro in the mortgage broker business, but this is the same BS that so many real estate agents use to baffle clients into thinking there's a lot of intrinsic professional value in the "services" they provide. Again, I'd say BS. For the most part, buying or selling real estate is a very simple transaction except for a very small percentage of "problem" properties where an agent or attorney might be of value to closing a deal.

Also, as posted above by another ... there's no such thing as "hiding" the fees, the commissions, and the charges any longer in the residential lending business. Any lender who tries to "rip off" a client with inflated appraisals, inspection fees, doc fees, extra high points, origination fees, closing fees, credit report fees, process fees, mailing charges, certified fund check charges, etc etc etc ... the "nickle & dimeing" of clients that's been done for years by abusive lenders ... is going to be caught out by knowledgeable mortgage seekers who will know to ask about these proposed charges in a timely manner and take their business elsewhere to a more ethical and reputable lender.

A more reliable comparison of what folks are buying as a business model would be to compare purchasing hard goods. With a mortgage to be purchased, who can deliver it to the buyer at the lowest net cost in the short and long term?