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MORTGAGE MANIAC

Broker vs. Bank

September 26th, 2007 12:25 PM

There is a lot of confusion in the marketplace regarding whether a borrower is better served going to a mortgage broker or going to their bank. The answer is simple…it depends.

As a mortgage broker, we get to "shop" hundreds of banks to find the bank with the lowest rates and fees. You see, every morning banks fax us wholesale rate sheets enticing us to send them business. Some days, a lender out of New York may be hungry and looking for business, the next day, a bank out of Kansas may be aggressively seeking loans. On a $300,000 loan, the difference between the BEST rate and the others can be over $130,000 over the course of a loan (6% vs. 7% on $300K).

A broker also has access to hundreds of programs. Whereby a bank only has access to THEIR programs.
Some banks are even HUNGRY enough to pay ALL the closing costs on your loan... And those, my friends, are my favorite!!

So, the question you need to ask yourself is this, “Do I know which bank is currently offering the lowest rate in the Country?” If the answer is no, call a mortgage broker or two.

Steve Walsh
The Mortgage Maniac

Posted by John Mangels on September 26th, 2007 12:25 PMPost a Comment (0)

Crystal Ball

September 17th, 2007 3:20 PM

Watch the talking heads of any financial news network and you can't help but notice that for every issue there are two sides, and for every prediction, there is one that counters it. Predictions are really just educated guesses that can change on a dime when unexpected events occur. Don't fall for their predictions, it can end up costing you thousands.

With respect to mortgages, people always ask me "Are mortgage rates going to go up or down?" The honest answer is that both are equally possible, and defendable positions in this market. For instance, I believe the economy is slowing down and therefore the Federal Reserve should cut the Fed Funds rate to stimulate the economy. This may cause mortgage rates to go down. Equally possible, is that due to the Feds move to cut rates is that the stock market is "juiced" by the cut and people dump mortgages to buy more lucrative stocks, thereby resulting in mortgage rates going up.

Anybody who tells you where mortgage rates are going with certainty is lying to you. I have heard of mortgage brokers making promises like " hey, close on this loan, the Fed will cut rates and you will be able to refinance lower in the future". Don't buy it, he doesn't know.

This is why the no-cost mortgage is the best mortgage product available. It offers our clients more than just a mortgage, it gives them a mortgage strategy. You get the best rate today, and if rates go lower, you will get the best rate tomorrow.

-Steve Walsh

Mortgage Maniac

Posted by John Mangels on September 17th, 2007 3:20 PMPost a Comment (0)