Mortgage Broker: Represents you, the client, by comparing and offering products from multiple lenders.
Retail Loan Officer: Works for one specific lender and can only offer their company’s mortgage products
How We Choose Your Lender: We evaluate factors like loan type, rates, and process efficiency. Some lenders specialize in FHA, VA, or bank statement/asset depletion loans. Our goal is to match you with the lender that offers the best rate and smoothest process for your unique situation.
How We Make Money: We typically earn a commission of 1.5% of the loan amount, paid by the lender and included in your mortgage costs. For example, on a $100,000 loan, our commission would be $1,500.
How Lenders Make Money: Lenders profit through origination fees, underwriting fees, and a yield spread premium (YSP), which are costs included in your loan rate. They also sell mortgage-backed securities (MBS) to investors.
How Servicers Make Money: Mortgage servicers earn a small fee from each payment you make, along with additional fees for handling escrow services like property taxes and insurance.
Where The Money Comes From: Most mortgages are funded through MBS, not by the servicers collecting your payments. Lenders bundle similar mortgages and sell them to investors, who receive dividends from your mortgage payments.
Where Interest Rates Come From: Interest rates fluctuate daily, influenced by the Federal Reserve, economic conditions, and demand for MBS. Locking in your rate at the right time is essential.
Paying Points: Prepaying points can reduce your interest rate, but we typically advise against it in today’s environment. It’s only worth considering if you plan to keep the loan long term. Our compensation doesn’t change based on how many points you pay.
Why Don’t Lenders Give You A Rate Upfront: Interest rates depend on factors like your credit score and home equity. An accurate rate requires detailed information. Rates given upfront without this are often inaccurate.
Waiting For Rates To Go Down: It’s possible to wait for rates to drop, but predicting the market is risky, similar to timing the stock market. If a loan makes sense now, it’s usually a good idea to lock in the rate. You can also choose to float your rate during the process.
