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Answers (9)
- Dustin Gosnell, "DustinGosnell4"
- Contributions:1
As many folks here have pointed out, many lenders have different programs with different terms and conditions. You certainly have to be weary of any offers that you see on-line. They like to throw out the best case scenarios to lure you in, but then after initial application it generally turns out that your situation does not fit into the mold of those low advertised rates. Or you may be seeing a rate advertised for a 15 year note instead of a 30 year note. My advice is to ask your agent for recommendations of loan officers that they have used in the past. I would also highly recommend shopping rates at 2 or 3 LOCAL lenders. Whether it be your bank or mortgage brokers, it is always helpful to be able to sit across a desk from someone and talk to them face to face.
- T.C. Whiting, "TC_at_PNC_Bank"
- Contributions:332
Not all loans are created equal and not all loan providers are created equal. And often the stuff you see online cant be trusted. But, I'd be willing to bet you can do a lot better than 4.75%. Try a different lender?
Brokers yes. Us big bank lenders get paid the same either way.
Brokers yes. Us big bank lenders get paid the same either way.
- Shane Milne, "ShaneTheMortgageMan"
- Contributions:463
Hi Thomas, I understand what you are saying, but as a bank more profit can be made by increasing the "spread" between what the bank pays for it's rates and what you can offer your client. So while you and I, the loan officers, won't get more compensation, our banks can. So if banks needed to make more profit (not the loan officer, but the bank) they could keep rate pricing the same even though mortgage backed security pricing dictates that a market improvement should have happened, etc.
Same with a mortgage brokerage firm on a consumer paid comp plan, if brokerage firm #1 decides on a comp plan at 200bps and brokerage firm #2 decides on a comp plan at 250bps, both from the same lender, same "tier", etc, then the brokerage firm #2 is making more money by offering higher rates than brokerage firm #1.
It all goes back to DeojiDeo's question of: Do mortgage brokers get paid more commission if they sell a mortgage with a higher rate?
What I recently realized is that Deoji may have wanted to know: Do loan officers with mortgage brokers have options to give borrowers different rates, and also get paid more commission if they sell a mortgage with a higher rate than if they sell a lower rate?
Same with a mortgage brokerage firm on a consumer paid comp plan, if brokerage firm #1 decides on a comp plan at 200bps and brokerage firm #2 decides on a comp plan at 250bps, both from the same lender, same "tier", etc, then the brokerage firm #2 is making more money by offering higher rates than brokerage firm #1.
It all goes back to DeojiDeo's question of: Do mortgage brokers get paid more commission if they sell a mortgage with a higher rate?
What I recently realized is that Deoji may have wanted to know: Do loan officers with mortgage brokers have options to give borrowers different rates, and also get paid more commission if they sell a mortgage with a higher rate than if they sell a lower rate?
- Thomas Hall, "Tennessee Loans"
- Contributions:381
As with any business an owner/operator determines what margin they want to make in their business model. The margin may be a per widget margin or just an overall average profit margin (in the case of loss leaders). It use to be that in the mortgage business you could adjust your margin. Now the margin needs to be fixed (at least for the loan officer).
I'm not sure I completely agree with Shane's comment at least how it applies to a bank
Anyplace you can get a mortgage (mortgage broker, bank, credit union, mortgage lender, etc.) makes more money offering higher interest rates than offering lower interest rates - mortgage broker included. The higher the interest rate, the more profit "on the back" is being made (vs. "on the front", which is what origination fees are).
A higher interest rate doesn't result in more profit for the bank (at least not in my bank). Anything over and above the par pricing is credited directly back to the consumer in a premium pricing credit. I'm not sure if that is the case across the board with mortgage bankers or brokers. It seemed like that was how some lenders were going to fund point banks.
You may see a difference in pricing based on the "margin" that is being to the loan officers. So if a lender/broker or loan officer has chosen to pay or be paid a higher margin than his competitor than it is possible that the pricing will vary.
I do agree with Shane's comment you should make your primary concern getting a mortgage professional with integrity who can deliver. If you focus on cost you may get what you paid for.
- KJ Parikh, "kjparikh"
- Contributions:2
Surely it does by a little bit but not very much, how is your FICO score? Any change in lock period? Pl call to get the rates if in NJ. Thanks. KJ
- Joe Cafiero, "Joe Cafiero"
- Contributions:3220
4.25% with minimal origination fees is definetly doable as of close of business on Friday on that loan amount. We all like to say that there is no difference in rates in dealing with a direct lender or a broker. However when it comes to FHA, that can be the case.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
See my response to you on your Trulia Post.
Happy funding, Rudi
Happy funding, Rudi
- Deborah Holmes, "Debbie Holmes"
- Contributions:386
I haven't noticed a difference for my clients. They used to charge a higher origination fee for smaller mortgages but I didn't notice a difference in the rates.
- Shane Milne, "ShaneTheMortgageMan"
- Contributions:463
Q: Do 30 year fixed mortgage rates vary depending on the loan amount?
A: The price of the interest rate can (but doesn't always) vary depending on the loan amount.
Q: Does a mortgage broker make more money if they sell a loan with a higher interest?
A: Anyplace you can get a mortgage (mortgage broker, bank, credit union, mortgage lender, etc.) makes more money offering higher interest rates than offering lower interest rates - mortgage broker included. The higher the interest rate, the more profit "on the back" is being made (vs. "on the front", which is what origination fees are).
The individual loan officer themselves do not make any more money by giving you a higher rate than you actually qualify for, they can't as that has been prohibited beginning on April 6th 2011, but the company they work for can make more money. The individual loan officer cannot be compensated based on the interest rate/terms of your loan, their compensation remains the same. However it can be based on the loan amount, as well as other factors, just not the interest rate & fees being charged.
Tip: You'll do much better (as in you'll actually be able to get the interest rates you are quoted) if you get your mortgage rate quotes from individuals rather than internet websites. It's natural to have the questions you have, but if you select your loan officer based on character rather than who is quoting the lowest interest rates & fees, you'll increase your likelihood of ending up with the best all around deal (rate, fees, closing on time).
A: The price of the interest rate can (but doesn't always) vary depending on the loan amount.
Q: Does a mortgage broker make more money if they sell a loan with a higher interest?
A: Anyplace you can get a mortgage (mortgage broker, bank, credit union, mortgage lender, etc.) makes more money offering higher interest rates than offering lower interest rates - mortgage broker included. The higher the interest rate, the more profit "on the back" is being made (vs. "on the front", which is what origination fees are).
The individual loan officer themselves do not make any more money by giving you a higher rate than you actually qualify for, they can't as that has been prohibited beginning on April 6th 2011, but the company they work for can make more money. The individual loan officer cannot be compensated based on the interest rate/terms of your loan, their compensation remains the same. However it can be based on the loan amount, as well as other factors, just not the interest rate & fees being charged.
Tip: You'll do much better (as in you'll actually be able to get the interest rates you are quoted) if you get your mortgage rate quotes from individuals rather than internet websites. It's natural to have the questions you have, but if you select your loan officer based on character rather than who is quoting the lowest interest rates & fees, you'll increase your likelihood of ending up with the best all around deal (rate, fees, closing on time).
Do 30 year fixed mortgage rates vary depending on the loan amount?
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