However, mortgage brokers don’t get “paid” anything UNLESS they charge the borrower a fee for their service
OR
overcharge the borrower in rate and get a commission back from the lender.
It’s a reward for screwing the borrower into a higher rate than they actually qualify for. The lender gets a higher return for the life of the loan and shares the bounty with the mortgage salesperson. Welcome to America.
The don’t get a penny if they offer the borrower the PAR rate. It’s all highly regulated beyond what most people know.
Paying a fair fee to get the PAR rate in the best loan that they qualify for is what most people should do, assuming that they plan on keeping the loan for at least 5 years.
Assuming that ” a big bank” will give you the best rate is simply ignorant.
Most people have no idea what they actually qualify for.
The service that one should be paying for, is to have someone get them a PAR rate, and have their loan choices and options explained to them in words that they can understand.
Banks have retail prices and wholesale prices. When you deal direct, you are dealing with a “retail” salesperson who has limited products to offer, and are at their mercy in both knowledge & programs.
It MUST be disclosed on your escrow statement if a commission was earned by a mortgage broker.
Banks and direct lenders do NOT have to disclose that you were overcharged, it’s internal and the salesperson may not even know it. There actually is a purpose for an honest person to get you into a loan, the problem is finding one.
Your 95% is probably pretty accurate.
Anybody who plans on keeping their loan for 5+ years is usually making a poor decision to get a “no cost” loan.
It will cost much more in the long run.
Most people have been screwed on their loans in either rate, fee or term; and it was often by a family member, friend or neighbor.
Shopping for a rate is silly. Shopping for a person to trust isn’t.
By your logic, if you don’t shop at Albertson’s, Vons or Ralphs, does that mean that you shouldn’t be buying groceries ?
