Mortgage Comparison?

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What are some key things to keep in mind when comparing mortgage loans from one bank to another. Any advice would be great.
For exmaple: intersest rate…..closing vs.no-closing cost etc……..

2 Comments
  1. Reply
    JoeRockstar
    April 29, 2011 at 9:41 pm

    The key things average consumers are worried about are the interest rate, closing costs, type of note (Fixed or Adjustable), and if there is a pre-payment penalty.

    No closing costs is a scam that loan officers use to make a deal appear better than it actually is. Any loan officer can offer you a no closing costs loan, but the interest rate will be higher than a loan with closing costs. The reason for this is because loan officers are paid a comission from a bank based on which rate they sell you. Therefore, if a loan officer sells you a higher rate, he will recieve a greater comission check from the bank and pay the closing costs himself.

    Here is an example…

    Loan with Closing Costs:
    – Rate 6.25%
    – Closing Costs Associated with the loan; $ 2000
    – Closing Costs borrower pays: $ 2000
    – Loan officer comission on 6.25%: $ 1200
    – Closing Costs Loan Officer Pays: $ 0
    – Loan officer total comission: $ 1200

    Loan without Closing Costs:
    – Rate 6.875%
    – Closing Costs Associated with loan: $ 2000
    – Closing Costs Consumer Pays: $ 0
    – Loan officer comission on 6.875%: $ 3500
    – Closing Costs Loan Officer Pays: $ 2000
    – Loan officer total comission: $ 1500

    As far as the other items…

    Go with a fixed rate note with no pre-payment penalty. The closing costs should never be over $ 2500 (not including pre-paid expenses)

  2. Reply
    Giardini
    April 29, 2011 at 9:46 pm

    Efficiency of the entire outfit/company. Everyone will tell you up front that they’ll get it done quickly.

    Go with a referral if you can. Our business is almost 100% referral because we give our clients a mortgage experience like none other. We’re brokers so can offer the same rate as just about everyone else (yes, we’re stumped here and there)… It’s all about efficiency, trust and getting it done in the end…

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