There is a web site that came to my attention today that has quite an interesting premise. It is called close your own loan.com tm and their tag line is " We've eliminated the loan officer, you keep his commission!tm " their website says "our online mortgage system allows you to compare and lock your new fixed interest rate and payment with no upfront costs in a sales pressure free, education-based environment. Simply choose your new mortgage rate, complete the secure online mortgage application and will handle the rest!" "No high commission salespeople= lower cost equals= lower rates"
Okay, so I think I'll bite. Who knows maybe I'm out of a job. I go to the website and price out a basic 30 year fixed loan for conforming loan amount of $417,000 for a borrower with a 740 credit score. Wow what a surprise. Their rate on this product is one full point higher than the base rate that we offer our clients. That translates to a whopping difference of $4753.36 Now I am not saying we'll beat them this bad every day, but that's how bad we beat them today. In my mind this gives new meaning to buyer beware. When you read the website it all sounds pretty good, and it is a very attractive and well done interface. But ask yourself if you're going to do all the work; shouldn't you really have that savings? But wait there's more, they offer a very interesting guarantee. "$1000 best rate guarantee. We have no high commission loan officers to talk you into paying too high of an interest rate, so the pressure is on us to deliver to you the best rate available and let the numbers sell themselves." They go on to say that if you find a better rate or fees from another legitimate lender within 30 days they will refund $1000 that means they pocket the difference of the $3753.36 not a bad job, if you can get it. I suppose one way to look at it is Northstone Mortgage is just not charging enough. But the model we are using is working for us. So if you'd like to save serious money give us a call or e-mail.
I think there is a certain perceived assumption of saving money based on the do-it-yourself model but with their pricing the savings just are not there. At Northstone Mortgage we are always going to put customer interest ahead of self interest and never boast about what great savings you can have if the savings simply is not there. The site touts the benefits of the online application etc.. realize that is nothing new in this industry by today's standard they should deliver not only a seamless online interface but a totally "green" process as well which, by the way, effective January 2009 Northstone Mortgage has done, but that's another story.
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