IF you are quoted the PAR rate for a loan, there is ZERO commission to a broker from the lender. Not a penny.
There are no back door deals, factory incentives, volume rebates etc. EVERYTHING must be disclosed through escrow and ALL compensation is shown on the final closing HUD statement from escrow.
If you pay discount points to a lender to buy down the rate, it goes to the lender, 100% of it. Not a penny goes to the broker.
If the buydown is 2.50%, there is nothing to negotiate.
If you expect the broker to split this with you, you are asking them to lose 1.25% for the pleasure of doing your loan.
THE ONLY TIME THAT A BROKER IS PAID A COMMISSION FROM THE LENDER IS WHEN YOU ARE NOT QUOTED THE PAR RATE. You are overcharged in rate which results in a higher payment for the life of the loan.
That is how “no cost” loans work. You are paying a higher % rate and higher payments for the life of the loan.
Nobody is doing a loan for you for free. When you fall for a “no fee” loan, it is not a no cost loan either.
The title & escrow company are completely separate from the mortgage broker. They want to be paid. The county gets paid a fee to record the docs. The notary wants to be paid for watching you sign your name. The appraiser wants to be paid to tell the lender what your house was worth yesterday.
The teaser rates that everybody wants to talk about are for PERFECT situations that most people DO NOT QUALIFY FOR.
10 different lenders could have 10 diff PAR rates.
There are multi conditions to qualify for the best PAR rate.
A good person tells you the truth about what the rates are and gives you the options of how to pay for them. MOST people dont get the truth or the PAR rate on their loan.
Going to a bank or credit union and assuming that they have the best rates is IGNORANT.
A bad broker will screw you beyond your wildest dreams.
A good mortgage will get you the best rate and fees that you actually qualify for.
Calling around and shopping by rate is the most idiotic thing that anybody can do, but it’s how most people shop for loans.
