What are some key things to keep in mind when comparing mortgage loans from one bank to another. Any advice would be great.
For exmaple: intersest rate.....closing vs.no-closing cost etc........
Mortgage Comparison?loans uk
The key things average consumers are worried about are the interest rate, closing costs, type of note (Fixed or Adjustable), and if there is a pre-payment penalty.
No closing costs is a scam that loan officers use to make a deal appear better than it actually is. Any loan officer can offer you a no closing costs loan, but the interest rate will be higher than a loan with closing costs. The reason for this is because loan officers are paid a comission from a bank based on which rate they sell you. Therefore, if a loan officer sells you a higher rate, he will recieve a greater comission check from the bank and pay the closing costs himself.
Here is an example...
Loan with Closing Costs:
- Rate 6.25%
- Closing Costs Associated with the loan; $2000
- Closing Costs borrower pays: $2000
- Loan officer comission on 6.25%: $1200
- Closing Costs Loan Officer Pays: $0
- Loan officer total comission: $1200
Loan without Closing Costs:
- Rate 6.875%
- Closing Costs Associated with loan: $2000
- Closing Costs Consumer Pays: $0
- Loan officer comission on 6.875%: $3500
- Closing Costs Loan Officer Pays: $2000
- Loan officer total comission: $1500
As far as the other items...
Go with a fixed rate note with no pre-payment penalty. The closing costs should never be over $2500 (not including pre-paid expenses)
Mortgage Comparison?
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Efficiency of the entire outfit/company. Everyone will tell you up front that they%26#039;ll get it done quickly.
Go with a referral if you can. Our business is almost 100% referral because we give our clients a mortgage experience like none other. We%26#039;re brokers so can offer the same rate as just about everyone else (yes, we%26#039;re stumped here and there)... It%26#039;s all about efficiency, trust and getting it done in the end...
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