Best Place To Get A Mortgage? I Went Thru A Broker And Paid Way Too Much In Fees. Better 2 Go With Bank Direct
Wondering if you get best rate and lowest fees by going directly with say Countrywide or Bank of America. Is it even possible to find a company that offers lowest possible rate and almost no fees? I purchased a condo in San Diego a few years ago and paid almost $5000 in fees that werent disclosed until very end of escrow. Because of this I do not trust mortgage brokers.
erinandn on Thu, 26th Nov 2009 1:23 am
You should have been given a Good Faith Estimate by your mortgage broker prior to closing and immediately after you signed the application.
You should check your last closing statement and see what the $5000 was for. Most of that I am sure went toward closing clost. You had to pay for taxes,insurance, title insurance, and escrow fees. Now what ever was left over I am sure were points and fees paid to the broker you used.
Your taxes an title insurance is based on the price you paid for your condo.
Now since you paid these fees in what we called up front you should have been able to deduct these fees and points on your federal income tax. You also get to deduct the interest rate.
I have a question for you, do you think that even if you get a no fee, no points loan that this loan is really free? Not by a long shot. The way the lenders such as Country Wide and Bank Of America and even mortgage brokers do this is simply by raising the interest rate. These institutions have overhead to pay, salaries, rent or mortgages.
With a no fee no points mortgage yoy may deduct on the interest rate.
The real question is how will this affect you. What is best for you in your current financial condition?
Do you want to pay the additional interest rate or do you want to pay the points and fees up front and be able to deduct them off your income tax yearly.
Your best bet is to sit down with your tax advisor, go over the scenerios available to you. After that you may make an intelligent decision as to what is better for you, both in the long run and short term.
Once you have all the information you can then make an intelligent decision.
The best place for you to get a mortgage is based on how much intelligence you have about the process and how the process help you.
So make sure you get a Good Faith Estimate after signing your loan application. When escrow opens call escrow and get another Good Faith Estimate. These are the things you need to stay on top of. These people work for you not the reverse.
Points and fees to your broker are negotiable. Taxes, Insurance, Title fees and escrow fees are normally set, so make sure you are looking at where the money is going.
I hope this has been of some use to you, good luck.
“FIGHT ON”
loanmast on Thu, 26th Nov 2009 1:31 am
I can certainly understand it. What you should have done is stop the closing until you were satisfied. It was your right to negotiate some of those fee’s.
What I would suggest is try several local lenders and ask them for a “good faith estimate”. It’s not dollar for dollar, but will give you a pretty good idea of what charges there will be. You have the right to question any of those fee’s. If the lender gives you the brush off, choose another lender. You want one willing to take the time to explain each and every charge. That is what they get paid the big bucks for! LOL
Good Luck!
Alterfem on Thu, 26th Nov 2009 2:04 am
Loanmast…. You said it perfectly. Banks charge less and give you a higher rate. Brokers can do the same. A Condo in San Diego had to be a little expensive. 5K in closing costs is very reasonable if you impounded taxes and insurance.
brandonb on Thu, 26th Nov 2009 2:07 am
As an FYI… per the Federal Trade Commission (FTC) http://www.ftc.gov/freereports , there is only one source for you to get a free credit report from all three credit repositories, “annualcreditreport.com”. https://www.annualcreditreport.com/cra/i…
Do not give anyone else your personal info without seeing them in person.
Make sure to price out your loan with your LOCAL banks and mortgage brokers only.
A lot people giving advice on here are also looking to give you a loan (it’s not advice, its advertising), if they are not local to you and you can’t get to them within 1 hour don’t fall for it. They say they are licensed in all 50 states, what does that mean? Which state do you have to look in first if something goes wrong? KEEP IT LOCAL; DON’T GET RIPPED-OFF BY SOMEONE IN WHO KNOWS WHERE WHICH YOU WOULD HAVE NO DIRECT ACCESS TO.
Remember Buddha’s advice:
“Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense.” You are the only “expert” you can trust: All brokers, and every other loan officer guru giving advice here with a .com or contact me at the end is “selling” you something (it’s not advice, its advertising). Don’t buy “it.”
When shopping for a mortgage, here are a few things to do to maximize your savings and time:
1. When asking for a Good Faith Estimate(GFE), tell each mortgage originator (lender) what interest rate to use so you can compare apples to apples (rate affects closing costs). This is probably a different thought process for you because you always shop interest rates on a mortgage right? Remember all mortgage originators have identical wholesale interest rates. If you shop the same interest rate among mortgage originators, it levels the playing field and discloses what they want to charge you for their time to originate and close your mortgage. It is similar to shopping for a car. Why does the exact same new car vary in cost from one dealership to the next? Some dealers want to make more profit than others.
2. Secure Good Faith Estimates from various mortgage originators within a 4 hour time frame (rate and pricing can change daily and even multiple times in one day).
3. Do not compare the prepaids, reserves, escrow, title charges, and government recording sections of the estimates; third part fees are not controlled by the mortgage originator.
4. Ask each mortgage originator to base the interest rate on a 30 day lock unless you need longer.
5. If the loan allows you to waive escrow (paying taxes & insurance yourself), let the mortgage originators know because this will affect closing costs.
6. If refinancing, let the mortgage originators know if you are pulling cash out. A cash-out refinance usually increases closing costs.
Your Biggest Challenge
The mortgage industry today has never been more unethical. The industry has produced several record-breaking years in a row regarding total origination and as a result, greed is driving the industry. Your biggest challenge is receiving a Good Faith Estimate that is provided to you in “Good Faith”! We spend more time showing consumers how mortgage originators are lying to them in regards to an estimate given! That’s right, lying! “Bait and switch” has become a prominent sales tool in the mortgage industry. Bait you in with a bogus estimate then switch things after you are hooked. This is so discouraging; banks and so called direct lenders have become some of the worst at this practice. Education is your biggest weapon against this practice. Take the time to fully understand closing costs and rates before proceeding.
You should know exactly how much the mortgage originator is getting paid by all sources (no matter where it comes from, it’s ultimately coming out of your pocket). Protect yourself by asking for and receiving prior to application and origination a written guarantee stating the TOTAL amount of compensation (YSP, rebates, commissions, kickbacks) that will be received and kept by the mortgage originator. This will help assure that your best interest is kept in mind.
Originating a mortgage is a service, not a product; compensation should not be based on the loan amount or interest rate.
All ethical, honest, upfront, transparent mortgage originators will be more than willing to provide you with a written total compensation guarantee in addition to the (GFE) Good Faith Estimate (focus on the word “Estimate” because that is exactly what it is, an estimate of charges) prior to originating your loan.