Best Mortgage?

[ucodegen]

But I still don’t understand how can a broker possibly give a better rate than a bank? Can’t I just walk into the same bank and get the same loan without paying any YSP?

Basically they can’t. But an ethical mortgage broker has better access to bank rates and can do a quicker job of comparing/shopping. If you don’t have the time to do the leg work/chasing down banks, a mortgage broker is a good alternative. Be aware, not all mortgage brokers are ethical. The YSP or Yield Spread Premium goes to the broker and creates a conflict of interest with respect to getting a mortgage. The broker in effect works for the bank, not you.. If using a mortgage broker, make sure that they are not the only one trying to find you a loan (do a first/best one wins).

[urbanrealtor]

See below.[quote=McNabbs]Thank you all for your advice.

But I still don’t understand how can a broker possibly give a better rate than a bank?
[/quote]
They can’t per se. However, they can shop the banks they work with in a way that you can’t do yourself. It may be that some banks have slightly lower rates or have standards that are better for your situation.
[quote=McNabbs]
Can’t I just walk into the same bank and get the same loan without paying any YSP?
[/quote] Yes. However you would be shopping in a smaller market (usually with only one vendor). Further, you don’t pay the YSP yourself. That gets paid by the bank. Sometimes there is a 1 to 1 relationship (eg: a 5% rate with no YSP vs. 6% with 1% to LO) however the relationship is often not that simple (eg: 4.75% at par vs. 5% with a point on the back to the LO). This way, it is sometimes a better option for people whose funds are tight as they approach closing (in the last example this would have essentially eliminated the need for an origination fee). And banks generally charge some version of an origination fee (or charge you the equivalent amount some other way). I am not saying that banks are worse per se, just that they are no better as a general category.

From a cost perspective:
-interest rate is more relevant than yield spread,
-total lending cost (the approximate nominal APR) is more important than interest rate,
-and cost structure (the feasibility of one-time costs vs. recurring expenses) is usually the most important[quote=McNabbs]
Or is it that the broker provides other services not available in banks?[/quote]
Since brokers usually have no allegiance to a particular bank they have no interest in towing the company line. However, the real issue is competence and the right fit. Many LO’s (both bank employees and brokers) suck and many are very good. Experience and reputation both matter. The skill sets are pretty diverse.

Don’t take my word for this.
Go talk to bank people and well-recommended brokers and find someone that can give you realistic estimates and who can answer your questions.

Good luck. Let us all know how it goes.

[urbanrealtor]

See below.[quote=McNabbs]Thank you all for your advice.

But I still don’t understand how can a broker possibly give a better rate than a bank?
[/quote]
They can’t per se. However, they can shop the banks they work with in a way that you can’t do yourself. It may be that some banks have slightly lower rates or have standards that are better for your situation.
[quote=McNabbs]
Can’t I just walk into the same bank and get the same loan without paying any YSP?
[/quote] Yes. However you would be shopping in a smaller market (usually with only one vendor). Further, you don’t pay the YSP yourself. That gets paid by the bank. Sometimes there is a 1 to 1 relationship (eg: a 5% rate with no YSP vs. 6% with 1% to LO) however the relationship is often not that simple (eg: 4.75% at par vs. 5% with a point on the back to the LO). This way, it is sometimes a better option for people whose funds are tight as they approach closing (in the last example this would have essentially eliminated the need for an origination fee). And banks generally charge some version of an origination fee (or charge you the equivalent amount some other way). I am not saying that banks are worse per se, just that they are no better as a general category.

From a cost perspective:
-interest rate is more relevant than yield spread,
-total lending cost (the approximate nominal APR) is more important than interest rate,
-and cost structure (the feasibility of one-time costs vs. recurring expenses) is usually the most important[quote=McNabbs]
Or is it that the broker provides other services not available in banks?[/quote]
Since brokers usually have no allegiance to a particular bank they have no interest in towing the company line. However, the real issue is competence and the right fit. Many LO’s (both bank employees and brokers) suck and many are very good. Experience and reputation both matter. The skill sets are pretty diverse.

Don’t take my word for this.
Go talk to bank people and well-recommended brokers and find someone that can give you realistic estimates and who can answer your questions.

Good luck. Let us all know how it goes.

[urbanrealtor]

See below.[quote=McNabbs]Thank you all for your advice.

But I still don’t understand how can a broker possibly give a better rate than a bank?
[/quote]
They can’t per se. However, they can shop the banks they work with in a way that you can’t do yourself. It may be that some banks have slightly lower rates or have standards that are better for your situation.
[quote=McNabbs]
Can’t I just walk into the same bank and get the same loan without paying any YSP?
[/quote] Yes. However you would be shopping in a smaller market (usually with only one vendor). Further, you don’t pay the YSP yourself. That gets paid by the bank. Sometimes there is a 1 to 1 relationship (eg: a 5% rate with no YSP vs. 6% with 1% to LO) however the relationship is often not that simple (eg: 4.75% at par vs. 5% with a point on the back to the LO). This way, it is sometimes a better option for people whose funds are tight as they approach closing (in the last example this would have essentially eliminated the need for an origination fee). And banks generally charge some version of an origination fee (or charge you the equivalent amount some other way). I am not saying that banks are worse per se, just that they are no better as a general category.

From a cost perspective:
-interest rate is more relevant than yield spread,
-total lending cost (the approximate nominal APR) is more important than interest rate,
-and cost structure (the feasibility of one-time costs vs. recurring expenses) is usually the most important[quote=McNabbs]
Or is it that the broker provides other services not available in banks?[/quote]
Since brokers usually have no allegiance to a particular bank they have no interest in towing the company line. However, the real issue is competence and the right fit. Many LO’s (both bank employees and brokers) suck and many are very good. Experience and reputation both matter. The skill sets are pretty diverse.

Don’t take my word for this.
Go talk to bank people and well-recommended brokers and find someone that can give you realistic estimates and who can answer your questions.

Good luck. Let us all know how it goes.

[urbanrealtor]

See below.[quote=McNabbs]Thank you all for your advice.

But I still don’t understand how can a broker possibly give a better rate than a bank?
[/quote]
They can’t per se. However, they can shop the banks they work with in a way that you can’t do yourself. It may be that some banks have slightly lower rates or have standards that are better for your situation.
[quote=McNabbs]
Can’t I just walk into the same bank and get the same loan without paying any YSP?
[/quote] Yes. However you would be shopping in a smaller market (usually with only one vendor). Further, you don’t pay the YSP yourself. That gets paid by the bank. Sometimes there is a 1 to 1 relationship (eg: a 5% rate with no YSP vs. 6% with 1% to LO) however the relationship is often not that simple (eg: 4.75% at par vs. 5% with a point on the back to the LO). This way, it is sometimes a better option for people whose funds are tight as they approach closing (in the last example this would have essentially eliminated the need for an origination fee). And banks generally charge some version of an origination fee (or charge you the equivalent amount some other way). I am not saying that banks are worse per se, just that they are no better as a general category.

From a cost perspective:
-interest rate is more relevant than yield spread,
-total lending cost (the approximate nominal APR) is more important than interest rate,
-and cost structure (the feasibility of one-time costs vs. recurring expenses) is usually the most important[quote=McNabbs]
Or is it that the broker provides other services not available in banks?[/quote]
Since brokers usually have no allegiance to a particular bank they have no interest in towing the company line. However, the real issue is competence and the right fit. Many LO’s (both bank employees and brokers) suck and many are very good. Experience and reputation both matter. The skill sets are pretty diverse.

Don’t take my word for this.
Go talk to bank people and well-recommended brokers and find someone that can give you realistic estimates and who can answer your questions.

Good luck. Let us all know how it goes.

[urbanrealtor]

See below.[quote=McNabbs]Thank you all for your advice.

But I still don’t understand how can a broker possibly give a better rate than a bank?
[/quote]
They can’t per se. However, they can shop the banks they work with in a way that you can’t do yourself. It may be that some banks have slightly lower rates or have standards that are better for your situation.
[quote=McNabbs]
Can’t I just walk into the same bank and get the same loan without paying any YSP?
[/quote] Yes. However you would be shopping in a smaller market (usually with only one vendor). Further, you don’t pay the YSP yourself. That gets paid by the bank. Sometimes there is a 1 to 1 relationship (eg: a 5% rate with no YSP vs. 6% with 1% to LO) however the relationship is often not that simple (eg: 4.75% at par vs. 5% with a point on the back to the LO). This way, it is sometimes a better option for people whose funds are tight as they approach closing (in the last example this would have essentially eliminated the need for an origination fee). And banks generally charge some version of an origination fee (or charge you the equivalent amount some other way). I am not saying that banks are worse per se, just that they are no better as a general category.

From a cost perspective:
-interest rate is more relevant than yield spread,
-total lending cost (the approximate nominal APR) is more important than interest rate,
-and cost structure (the feasibility of one-time costs vs. recurring expenses) is usually the most important[quote=McNabbs]
Or is it that the broker provides other services not available in banks?[/quote]
Since brokers usually have no allegiance to a particular bank they have no interest in towing the company line. However, the real issue is competence and the right fit. Many LO’s (both bank employees and brokers) suck and many are very good. Experience and reputation both matter. The skill sets are pretty diverse.

Don’t take my word for this.
Go talk to bank people and well-recommended brokers and find someone that can give you realistic estimates and who can answer your questions.

Good luck. Let us all know how it goes.

[george]

Why care what the broker is making from YSP, rebates, fees, etc, as long as they get you the best deal (including rate, fees, pre-pay penalties, etc)? You do need to get quotes from multiple lenders/brokers to know whether you are getting a good deal.

The key is finding a reputable broker who will give you an accurate and honest “Good Faith Estimate” of the loan costs in writing.

Beware of shady brokers who will bait & switch borrowers by offering loan terms they can’t deliver on. You don’t find out until you are escrow that you can’t get those great terms/rates anymore. The broker will usually blame it on the lender. At this point buyers are vulnerable and will often pay a higher interest rates, etc to save the deal.

A good broker can save you a lot of leg work and often find better rates than the big banks offer. As long as the financing goes through, it doesn’t matter much if the broker uses some flaky lender that will be out of business next year. It will have no impact on you. However, if you’re on shaky financial ground and think you may require a loan modification down the road, then it may make more sense to use a blue chip lender.

[george]

Why care what the broker is making from YSP, rebates, fees, etc, as long as they get you the best deal (including rate, fees, pre-pay penalties, etc)? You do need to get quotes from multiple lenders/brokers to know whether you are getting a good deal.

The key is finding a reputable broker who will give you an accurate and honest “Good Faith Estimate” of the loan costs in writing.

Beware of shady brokers who will bait & switch borrowers by offering loan terms they can’t deliver on. You don’t find out until you are escrow that you can’t get those great terms/rates anymore. The broker will usually blame it on the lender. At this point buyers are vulnerable and will often pay a higher interest rates, etc to save the deal.

A good broker can save you a lot of leg work and often find better rates than the big banks offer. As long as the financing goes through, it doesn’t matter much if the broker uses some flaky lender that will be out of business next year. It will have no impact on you. However, if you’re on shaky financial ground and think you may require a loan modification down the road, then it may make more sense to use a blue chip lender.

[george]

Why care what the broker is making from YSP, rebates, fees, etc, as long as they get you the best deal (including rate, fees, pre-pay penalties, etc)? You do need to get quotes from multiple lenders/brokers to know whether you are getting a good deal.

The key is finding a reputable broker who will give you an accurate and honest “Good Faith Estimate” of the loan costs in writing.

Beware of shady brokers who will bait & switch borrowers by offering loan terms they can’t deliver on. You don’t find out until you are escrow that you can’t get those great terms/rates anymore. The broker will usually blame it on the lender. At this point buyers are vulnerable and will often pay a higher interest rates, etc to save the deal.

A good broker can save you a lot of leg work and often find better rates than the big banks offer. As long as the financing goes through, it doesn’t matter much if the broker uses some flaky lender that will be out of business next year. It will have no impact on you. However, if you’re on shaky financial ground and think you may require a loan modification down the road, then it may make more sense to use a blue chip lender.

[george]

Why care what the broker is making from YSP, rebates, fees, etc, as long as they get you the best deal (including rate, fees, pre-pay penalties, etc)? You do need to get quotes from multiple lenders/brokers to know whether you are getting a good deal.

The key is finding a reputable broker who will give you an accurate and honest “Good Faith Estimate” of the loan costs in writing.

Beware of shady brokers who will bait & switch borrowers by offering loan terms they can’t deliver on. You don’t find out until you are escrow that you can’t get those great terms/rates anymore. The broker will usually blame it on the lender. At this point buyers are vulnerable and will often pay a higher interest rates, etc to save the deal.

A good broker can save you a lot of leg work and often find better rates than the big banks offer. As long as the financing goes through, it doesn’t matter much if the broker uses some flaky lender that will be out of business next year. It will have no impact on you. However, if you’re on shaky financial ground and think you may require a loan modification down the road, then it may make more sense to use a blue chip lender.

[george]

Why care what the broker is making from YSP, rebates, fees, etc, as long as they get you the best deal (including rate, fees, pre-pay penalties, etc)? You do need to get quotes from multiple lenders/brokers to know whether you are getting a good deal.

The key is finding a reputable broker who will give you an accurate and honest “Good Faith Estimate” of the loan costs in writing.

Beware of shady brokers who will bait & switch borrowers by offering loan terms they can’t deliver on. You don’t find out until you are escrow that you can’t get those great terms/rates anymore. The broker will usually blame it on the lender. At this point buyers are vulnerable and will often pay a higher interest rates, etc to save the deal.

A good broker can save you a lot of leg work and often find better rates than the big banks offer. As long as the financing goes through, it doesn’t matter much if the broker uses some flaky lender that will be out of business next year. It will have no impact on you. However, if you’re on shaky financial ground and think you may require a loan modification down the road, then it may make more sense to use a blue chip lender.

[Raybyrnes]

I would simply start out with some of your own research. One of the best places to go is the Mortgage professor.

http://www.mtgprofessor.com/home.aspx

Basically an Angies list service for Mortgage Professional. I have not done business with HLS but he seems for follow a similar practice.

[Raybyrnes]

I would simply start out with some of your own research. One of the best places to go is the Mortgage professor.

http://www.mtgprofessor.com/home.aspx

Basically an Angies list service for Mortgage Professional. I have not done business with HLS but he seems for follow a similar practice.

[Raybyrnes]

I would simply start out with some of your own research. One of the best places to go is the Mortgage professor.

http://www.mtgprofessor.com/home.aspx

Basically an Angies list service for Mortgage Professional. I have not done business with HLS but he seems for follow a similar practice.

[Raybyrnes]

I would simply start out with some of your own research. One of the best places to go is the Mortgage professor.

http://www.mtgprofessor.com/home.aspx

Basically an Angies list service for Mortgage Professional. I have not done business with HLS but he seems for follow a similar practice.

[Author]

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