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My friends are talking to a mortgage broker...advice on mortgages please?

Are there some brokers who can get better rates than others? It seems that their works with all different banks, and in New York...I had a broker like that who helped me with the financing of my apartment there.

However, when I moved to Florida, my lawyer recommended a mortgage person who works for Bank of America. In fact, I spoke about him in my book.

NOw, my friends who are trying to buy this house called and asked me if they're better off with a broker who deals with all banks, or one who works exclusively for a bank. I guess I think they're better off with theirs, but then again...maybe I'm wrong. Also, are the rates really quite different from one broker to another...as it is really established by the government, isn't it? I assume the bank pays the broker, as that's what I remember.

How much does a closing usually cost? Where would I find that information for South Florida?

They have excellent credit, and apparently enough money to put down on the home to make their payments affordable with both of their incomes.

Please advise me once again. And, of course they have to sell their current home in a pretty awful market here.

Posted by Lois Geller Marketing Trainer/Speaker/Author on 08/16/2008 06:00 PM

Comments (13)

mortgage brokers, interest rates vary, fived versus variable rates, closing costs differ, is there a book

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13 Comments on My friends are talking to a mortgage broker...advice on mortgages please?

AUG

2008

Lois, it is our opinion that the best deal for a mortgage is who ever can get you the best rate with the lowest closing cost, but make sure they get a good faith estimate and look over it very well before commiting. Where the loan is acquired is critical to the closing ease and closing cost, after closing, it will not matter very much as they will sell the loan anyway.

Beware of mortgage brokers and "junk fees". They like are simply ways to charge move for services and add extra for loan origination fees, apprasail fees. loan application fees, and fees that are added beyond normal. As a Realtor we avoid thing like "tranaction fees" as they seem to be a way to charge an extra fees.

Personally we say avoid internet mortgages as they tend to get you to the closing table and surprize, surprize, junk fees. We believe it is best to deal with a person that you can talk to.

As for South Florida, we are in Texas so we cannot speak for that area, however we have found a notional company like Coldwell Banker Mortgage will do a good job, minimize junk fees and close you on time wiith less hassle. Have your friend call 1-866-881-9081 and they can get approved on the phone. (We get nothing for this recommendation, we just like the service they give)

Team Stanley

Texas Best

visit www.elliscountymoves.com and send us referrals, we pay you 30% for referrals at closing.

turtle Hello! I am a loan officer and work for a Mortgage Broker and I also had my own company. Many times you will be able to get the best deal from a Broker (if they are a good broker). The rates are quoted depending on how much the broker and/or bank wants to make. Money is made on the back side (the interest rate) and with the fees charged on the loan. The bank will normally not vary their closing costs and/or rates. A broker has the option to adjust both. Get a good faith estimate from both and a quoted rate; this way you can compare apples with apples and make your choice depending on the rate & costs. With good credit they should be able to negotiate the rate with who ever wants the loan and have them ask how much are you making on the back side! E-mail me if you have any more questions! Brenda :) P.S. I have done loans for bank employees because I could give them a better deal!

And ask them to write in anything not on the good faith estimate you will NOT have to pay for at closing.

AUG

2008

You need to check who can get you the lowest closing cost and the best rate. Remember the importance of a good faith estimate and look at it very closely before commiting, preferably use a lawyer to go over it. no matter what they will sooner or later sell the loan.

I am a mortgage broker and Realtor so I have a different prospective. Most people would say to find the lowest rate and closing costs. If that were the case, then maybe these same folks should say let's find the cheapest trainer or speaker. Or maybe, let's go FSBO! In the end, it is about a combination of services and product that fits the consumer the best. In finding the lowest rate, a consumer may give up benefits that would derive from having lower closing costs. Conversely, lower costs may mean higher rates. With thousands of loan programs available, the best way to insure that consumers a loan that fits their needs is to interview a number of companies about their loan products and services.

Louis, I would probably recommend that your friends start doing some reasearch online.. There are a lot of mortgage comparison sites that can help them get started... They should start getting different quotes from different banks rather than just rely on one bank... Rates really vary by banks..

There are some excellent sites online to help you. Google it!

It's amazing to me that 2 mortgage brokers, not to mention the other post that none mention APR.

Isn't that what it's all about...APR? Isn't the whole purpose of stating the interest rate AND the APR is to be able to compare Apples to Oranges and make them equal by adding all the "fees" in to an artificial rate called APR?

What am I missing here?

AUG

2008

Frankly there are excellent brokerage companies who will in most cases do a better job than many of the national Banks. The key is in finding the right brokerage. I know of a borrower last month where a national bank gave a pre-approval for a $190,000 95% Loan to Value purchase. Three weeks later the borrower entered into a purchase agreement with a 30 day escrow. The day of closing, 7 weeks after his application, after paying for an appraisal and home inspection, he was told that he did not qualify! He ended up going to a broker who funded his 30 years fixed rate fully documented loan at the same interest rate and a one point cost and did it in 21 calendar days. There were $1,000 in other broker fees which were disclosed.

Incompetent would be the only kind words one could use to describe the national lender. So what if the broker had $1,000 in miscellaneous fees? That broker performed and earned every cent he disclosed and charged. If they can't perform the lowest rate and fee's don't really amount to much. In many cases you get what you pay for and cheapest is not always the best. APR is one way to compare rates for identical loan products but do not guarantee performance.

Every state is different but here is a simple solution. When in doubt, run a double application with more than one broker/lender. It will cost you for a separate appraisal but you can consider it an insurance policy. Take them both to loan documents and sign the one that is in your best interests. Many will say that is not the right way to do business but you need to protect your own interests.

Keith, what happened to "trust"? If you have to submit to 2 lenders to be assured you get a loan and pay double appraisal costs, don't you need better advise to begin with on where to get a loan?

That to me is like advising using 2 different agents to negotiate an offer and which ever one comes up with the best negotiation, sign that offer. Crazy. I ONLY refer my clients to loan officers that have a PROVEN track record of NOT screwing up....and I don't allow for any mistakes. It goes without saying...that is a SMALL list I have.

AUG

2008

David. I do not disagree with you. I have no doubt that you are a professional who has a data base of trusted associates. Perhaps I misunderstood the question which I interpreted as "What do you do if you are in an area where you are unfamiliar and have no previous experience and don't know who to turn to for a loan, broker or lender"? They might not even have an agent if buying FSBO. I have seen many people over the years that go to the closing table and were forced to take it or leave it and of course ended up taking it because their backs were to the wall.. Again, IF you have reservations a double application is like an insurance policy.

Keith...you're right....that IS a problem. It's a shame this county has lost so many values from the ole days that you can just trust profesionals in an industry to be honest.

David. I reviewed your profile and no doubt you have seen it all....as have I. It is not just honesty in this day and age as I have seen so many institutions close down or have their underwriting guidelines change overnight. Many things can be beyond the control of the loan officer these days. FNMA & FHLMC negotiate different purchase terms with different lenders and they along with PMI companies have shifting sand for their underwriting foundations it seems. What exists today may not be here tomorrow. Honesty should be a given in our industry but financing is amongst the most difficult aspects of a purchase transaction these days and will continue to be over the next 5 years. My opinion only of course. Good luck & hard work to us all.

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