Ray..
If it were a perfect “honest” world you are exactly right…
Different lenders have different “par” rates.
I have a way to possibly pull a higher credit score than somebody else at the exact same time.
Either of these things can make a difference of tens of thousands of dollars over the life of a loan.
I can’t guarantee anyone that I have the lowest rate on the planet, but I know that I am lower than most.
Another problem is that rates really can change quickly, AND when people are calling around shopping, the mortgage person knows this, so they often underquote their rate and fee, knowing that the person is just shopping anyway. They lie to sound like they have the lowest rate & fees.
Then the borrower asks for a “Good Faith Estimate”, which can be just more lies, but on paper.
All the experts say ALWAYS ask for a Good Faith Estimate so you can compare costs and fees, blah, blah, blah.
At the top of every good faith estimate it states:
“Information provided below reflects estimates of the charges you are likely to incur, the fees listed are estimates-actual charges may be more or less”
This is the govt helping you when comparing mortgages. How can you compare with this foolishness ??
Calling around for rates often leads to the biggest liar. Amazing how things can change after you decide to work with a liar.
As mentioned, in my opinion, there is no reason on a REFI why a borrower cannot be quoted guaranteed costs/fees to get the best rate available at the time they lock. Proration of interest or taxes can change, but the fees/costs shouldn’t…
**Changing a loan amount can change some fees
If it’s a purchase, you are at the mercy of the seller’s choice of escrow with their garbage fees. Doc prep, loan tie in, courier, email doc fee etc.
In a mortgage broker transaction, it will always be on the closing statement signed at docs if the mortgage originator is getting any type of commission. It is never in the column of debits or credits, it is off to the left and marked (poc)
which means “paid outside closing” IF There is any commissions, fees, rebates, or any other compensation paid outside of escrow, it is illegal, with serious fines/penalties.
If you are getting a loan from a bank or direct lender, they are not obligated to show the (poc)
which leads many people to believe that they got the best rate without paying a fee, which isn’t true, it’s just buried in the rate, without being disclosed. You get a higher payment.
I don’t care if people shop. I can’t do anything about it. Some mortgage people scare borrowers by telling tham not to let others run their credit, it will lower their score. That is not exactly true, but keeps many people from shopping.
The fact is that most borrower’s aren’t going to get the best rate that they qualify for on the day the lock because of the way they shop.
Personally, I credit the borrower with any commission back from the lender, and my clients understand this from the beginning so there shouldn’t be any confusion. I give them the choice.
It’s more important to shop for the PERSON to do your loan than to shop for the rate, but sadly very few people understand this….HLS
