All to often, do I have a conversation with a new customer about what this “other company” quoted them on interest rates and closing costs. Sure, I would personally take 3.9% with no closing costs also…heck I might as well work for that company! The way I see it I should be a millionaire by the end of the year, since I’m going to beat every competitor in the nation with those interest rates and closing costs!

People, please do your homework! Don’t let your local bank or some small time mortgage company tell you they have the best interest rates and closing cost and then just believe him or her. Get their quote in writing! Especially, if you have never worked with this individual or have not been recommended by someone you trust. You should get yourself a second opinion and perhaps a third opinion, if this helps give you peace of mind.

Make sure the quote you get in writing is on the Good Faith Estimate (GFE). This will layout all costs for doing the loan. Any hidden fees or junk fees should be exposed on the GFE.  Make sure you hold onto this GFE and compare it to your final loan documents.  If there is a change in the costs, it needs to be explained for a good reason, otherwise don’t let the company try to charge you additional fees that were never disclosed up front.

This is something I see to many people not take the time to ask for the quote in writing.  Have them email it, fax it, or even mail it.  I know just about everyone has email and all mortgage companies should be happy to email the quote to you.  I know I would be happy to give you my quote in writing!

Don’t forget this small part of the mortgage process…it could save you a lot of money in the long run!

If you want me to look over your Good Faith Estimate, feel free to contact me.

When being quoted a rate and closing costs for your mortgage loan, do you ask for these numbers in writing? If you do, and I hope most of you are doing this, you will get a copy of the Good Faith Estimate (GFE).

As an example, a Wisconsin mortgage loan will have the following fees regardless of what company you choose to work with:

- Appraisal Fee – $275
- Credit Report Fee – $11 (this one can vary a few dollars)
- Underwriting Fee – $699
- Total Title Fees – $525
- Recording Fee – $75 (this one car vary a few dollars)

**Please keep in mind all these fees could vary with a different company, since all mortgage companies use different third party services.

If these specific fees are any higher than what you have been quoted, you need to get another opinion. Perhaps I could help, since those fees are what I can normally offer.

But you are reading this to find junk fees when being quoted closing costs. Well, here they are in no particular order…

1. Broker Fee
2. Application Fee
3. Administration Fee

That’s it folks! These fees should not be in your quote or in your final paperwork. How come? They are extra fees a company tries to charge for no particular reason to try and make extra money off of you. You may find an origination fee and processing fee when necessary, but these other fees are NOT necessary.

If you feel you are being charged junk fees with your mortgage financing, feel free to ask me about what should and shouldn’t be charged. While you are at it, let me give you a second opinion!

Click here if you would like me to contact you today!

A recent article, I have copied below, talks about a bill that should reach President Bush soon. Hopefully, it will allow people looking to buy homes with no money down to qualify for an FHA loan still.

Currently, people need 3% as a down payment for FHA loans. If this bill passes, and it’s looking better than ever, it could help tremendously with those having a hard time getting financing for a new home or trouble refinance their existing loan.

Here is the link: Subprime alternative: FHA reform deal close

1. Wholesale Interest Rates

Let’s use Countrywide as an example. Countrywide gives a mortgage broker, like myself, access to wholesale interest rates as another avenue of revenue for themselves. Most times I will be able to offer 0.25% or better on an interest rate compared to you walking into the front door of Countrywide’s building. Think about it this way, Countrywide does not have to spend money on marketing and taking the time to generate your business. They just hand over the rates and let us bring in the customers, then in turn, we sell the loan directly to them.

We all have heard of our mortgage loan being sold after it closes. It makes no difference using a mortgage broker that works directly in correspondence with a lender you were going to use in the first place. Wait, there is a difference…WHOLESALE INTEREST RATES!

2. Service

Ahhh, the magic “S” word that so many companies claim is their #1 priority. Yes, mortgage brokers are paid a commission, but it’s basically for your benefit as a customer. A commission or bonus based employee will always be more focused on getting the job done. The same thing goes for a company that offers their employees a bonus for meeting monthly goals. It’s an incentive to work harder and smarter! Some may look at is as an unfortunate thing that we have to place bonuses and commissions to motivate the employees, but heck, it works! Wouldn’t you focus harder on getting that project done at work, if you know you were getting extra money if completed in a certain timeline? Most people would!

Service is very important to a mortgage broker. You build this connection that he/she can be trusted, since they may be contacting you on the weekend or later at night, since it is the best time for you to talk. This happens a lot when dealing with families. The average person gets off of work at 4 or 5pm and then has to deal with the children and things at home. It’s almost 6 or 7pm before they have time to sit down and talk about their mortgage situation. Do you know of a loan officer at a local bank that services you at 7pm?!

3. Multiple Lenders To Work With

Mortgage brokers have access to multiple lenders for the customers benefit. Here are two reasons this can be beneficial:

a. When interest rates are available in the morning, the broker will have access to multiple banks interest rates. On any given day, one banks rates may be better than the others. The next day it may be a different bank with the best rates. The point is, having multiple banks to work with can benefit in looking for the best interest rates that day.

b. If a borrower has a unique situation, like a self-employed customer doesn’t claim enough on his/her taxes to qualify for the loan, I can look at different banks that allows the borrower to state his/her income on the loan application. Unlike a local bank, they either can or cannot do this. No other option for the customer.

Access to multiple lenders gives the customer multiple options, especially if someone has a unique situation like employment, credit, or income.
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It’s very simple to refinance your FHA loan into a lower interest rate.