Posted on: 19th Feb, 2008 04:13 am
I am a first time buyer and looking for the right lender/bank/broker..i am confused where to apply..i did call up some banks ..two of them sent their loan officers..and they gave some qotes too.but my question is, do I rely on them or the bank, I mean the rates that they are offering..are they in accordance with what the banks ask them to follow?what if I approach brokers? Can two loan officers working with the same bank and in the same state offer the same rate or will it be different?
You can get different quotes from the same banks loan officers. The banks give their loan officers a rate sheet each morning which shows a list of rates and also how much they can make on each rate. That is called Yield Spread Premium.
As a broker I am required to disclose the amount of Yield Spread that i am making on each loan as banks do not have to disclose this. I think you should consult a broker as well. Generaly brokers recieve better rates from bank than their own loan officers do, its called Wholesale lending. Let me know if I can be of any further help.
As a broker I am required to disclose the amount of Yield Spread that i am making on each loan as banks do not have to disclose this. I think you should consult a broker as well. Generaly brokers recieve better rates from bank than their own loan officers do, its called Wholesale lending. Let me know if I can be of any further help.
Thanks brad. So, you mean every morning the rates may vary, that too, from one loan officer to another dealing with the same mortgages for the same bank. is the yield spread minimum the profit made by a loan officer?
Every Morning a new rate sheet comes out. This sheet will show how much the loan officer makes for each rate. Some loan officers may be willing to take less then others so thats how you get different rates.
I get most of my business because I will always take less because its better than nothing but some guys don't think that way. Let me know if you have any more questions.
I get most of my business because I will always take less because its better than nothing but some guys don't think that way. Let me know if you have any more questions.
Hi Jefferson,
Loan officers can increase the interest rate whether they work for the bank or for a broker. It can be quite confusing when comparing mortgage loans but the best advice I can give is to compare them on the same day. Since rates do change daily, if you compare them on the same day then you you can get a better comparision to see who is "marking up" the interest rates more or less based on the current market. A good broker can get better rates than going direct to a mortgage lender in many cases. A bad broker will cause nightmares. Hope you find the right one to work with.
Loan officers can increase the interest rate whether they work for the bank or for a broker. It can be quite confusing when comparing mortgage loans but the best advice I can give is to compare them on the same day. Since rates do change daily, if you compare them on the same day then you you can get a better comparision to see who is "marking up" the interest rates more or less based on the current market. A good broker can get better rates than going direct to a mortgage lender in many cases. A bad broker will cause nightmares. Hope you find the right one to work with.
I always tell persons to talk to a local bank, broker, and a retail lender ( someone that does loans but does not have a bank in your state ) Ex. Countrywide, WAMU, Bank of America. In truth, rates differ from lender to lender, loan officer to loan officer, and sometimes , hour to hour.
Both brokers and sometimes other lenders have the power to underprice their loans in order to maintain competitiveness with other lenders. It is not exclusive to brokers, however, it is always good to shop. A broker might have the best options for you.
Both brokers and sometimes other lenders have the power to underprice their loans in order to maintain competitiveness with other lenders. It is not exclusive to brokers, however, it is always good to shop. A broker might have the best options for you.
I think it comes down to just doing the leg work to find the best deal.
i think (actually, i know) that the rate/point issue is far less important than the confidence you have in your loan officer to get the job done and in a timely and professional manner.
if i had to pay an extra 1/8 or 1/4 to avoid some of the loan officers i have seen mentioned in forums here in order to find one of the good loan officers whose reputation for being well-informed, communicative and helpful, professional and knowledgeable, i would jump at the opportunity.
in practice, we often find borrowers coming in the door with no money. different prices on loan products allow us to accommodate those folk by charging a slightly higher rate while absorbing some of the required costs. for those who are flush with cash and able to pay points easily, rates are typically quoted lower.
the best products available for first-time homebuyers (and some who used to own but don't now) are bond programs that most states offer. these are tightly regulated in terms of the interest rates (set by the states, not the lenders) and the points and fees allowed to be passed along to a borrower.
a good rule of thumb...if your lender operates in a state that has a bond program and neglects to offer that program to you (if you qualify), then you ought to run as fast as you can. you will not find a cheaper alternative than these programs, and they are nowhere near as difficult as they are touted to be.
if i had to pay an extra 1/8 or 1/4 to avoid some of the loan officers i have seen mentioned in forums here in order to find one of the good loan officers whose reputation for being well-informed, communicative and helpful, professional and knowledgeable, i would jump at the opportunity.
in practice, we often find borrowers coming in the door with no money. different prices on loan products allow us to accommodate those folk by charging a slightly higher rate while absorbing some of the required costs. for those who are flush with cash and able to pay points easily, rates are typically quoted lower.
the best products available for first-time homebuyers (and some who used to own but don't now) are bond programs that most states offer. these are tightly regulated in terms of the interest rates (set by the states, not the lenders) and the points and fees allowed to be passed along to a borrower.
a good rule of thumb...if your lender operates in a state that has a bond program and neglects to offer that program to you (if you qualify), then you ought to run as fast as you can. you will not find a cheaper alternative than these programs, and they are nowhere near as difficult as they are touted to be.
