Buying my first home and in market for applying loan. Need some guidance on applying for loan: 1. For same bank, Applying directly vs 3rd party loan officer, will the interest rate be same or any advantage going with loan officer? 2. Can a 3rd party loan officer has a shortcut to apply for multiple banks at the same time or do they apply manually to each bank on behalf of me? 3. Any suggestions on small banks /credit unions that offer lower mortgage rates based in your recent experience? TIA for your inputs #mortgage #housing
I’m going to start by explaining a little bit about the difference between a broker and a direct lender. Mortgage brokers have access to multiple banks/lenders and are capped to charging clients 2.75% for the loan. Mortgage brokers have 2 options to sell you a loan. If the broker sells you the loan Borrower paid you pay at closing the broker fee which right now is ranging from 1%-2.50% depending on how competitive the broker wants to be and give up on his/her commission. Borrower paid will give you the best rate. The other option is lender paid fee where the lender is paying the broker on your behalf the broker fee. Lender paid fee will give you a higher rate the lender is basically baking in your rate the broker fee. Direct lenders are banks, credit unions , & lenders that fund their own loans and don’t use other lenders to fund their loans. These lenders don’t really have a cap to the fee they can charge their clients. These loans and the rates you’re offered already have the lenders fee baked into the rate. When rates were lower direct lenders had very competitive rates compared to brokers. Right now they are slightly higher due to their fee being baked into the rate and lenders are all competing for business right now so brokers are getting a slightly better rate if you’re willing to pay the broker their fee. A credit union or your bank you have an established relationship with May offer you a very competitive rate. In all honesty what you want is a knowledgeable & experienced loan officer. A loan officer that will answer your calls,text, and will answer all your questions and educate you in your loan process. Working with an inexperienced loan officer without the proper support from their team can cause you to lose your property due to simple mistakes by not having enough time to followup on your file or even something as simple as qualifying you for the wrong amount this happened to me when I bought my first property.
I've heard private business charge more in closing cost. Going directly to major banks save you more.
Title fees can be costly this is determined by the title company you use at closing, not the banks nor mortgage broker. Closing fees are basically points for the rate, title fees, taxes & prepaids. There’s really no closing fees that comes from brokers or banks. Brokers are the only ones you can choose to pay them their fee yourself and not have it baked into your rate like major banks and direct lenders do. With major banks and direct lender you don’t have choice how to pay them their fee it’s already calculated in your rate.
Who talks about title fee?
Compare loan terms (including origination costs and points) with different loan options. Loan brokers (or 3rd party loan officers) deal with secondary mortgage backed security market, and they take a cut of their own. When I compared the rates, I saw a .7 percent difference between bank and loan broker.
.7 in favor of applying directly, I assume?
Yes