Secrets Creditors and Agents Do Not Want You To know...
We may not be making many friends with this blog post but we hope that knowing the TRUTH will save you money and make you a smarter homeowner.
Today we're sharing with you a few inside secrets about mortgages:
- Most home loans are conforming, government backed loans with exactly the same guidelines from creditor to creditor, whether you are looking into a 3% Down Fannie Mae, a VA Loan or an FHA backed conforming loan. If any agent or creditor says they can do things others can't with qualifications and guidelines, you are most likely being misled!
- Your Credit Score Will impact the final rate and terms, lending in today's Hampton Roads market is not a one size fits all proposition. An experienced, direct, local creditor will be able to help with some credit coaching at no additional fee.
- You should SHOP around. Agents and creditors do not want you interviewing others. Creditors in particular do not go out of their way to let you know that at any time prior to final loan approval you can switch creditors. So…don't stop shopping until you lock in a rate and the upfront terms are best for you. Be aware, switching creditors may impact your closing date so you will want to work with your agent before making any moves.
- Here's a secret: Many teams and agents have side deals with a creditor and will refer most of their buyer clients to get their loans. These "Marketing agreement" true cost and terms do not need to be disclosed to you although in the end YOU are paying these relationship fees.
- Agents and companies that do massive online, radio, and TV ads may be funded thousands of dollars a month from the creditor. They do not have to disclose these payments or the amounts because "Technically" they are not tied to your loan...but they are! You see, this is a loophole in the new laws designed to protect the consumer from this type of practice.
- What's REALLY Going on with those upfront fees? An origination fee is usually 1% of the sales price, let's use a $250,000 home. The Origination would be $2500 up front in closing costs to get the loan. Most likely there is a built in HIGHER INTEREST RATE including this origination fee. So not only are you possibly paying too much up front, you’re also not getting the best long term rate. The key is knowing how to frame your questions when shopping.
- BEWARE of an agent that you met online or through an ad that is overly aggressive for you to use their creditor. They are most likely not telling you that referring you is their obligation for the money the creditor or service provider is paying their firm on the side for leads.It's okay to shop with the agent’s creditor but DO NOT stop there. A great Buyer's Realtor should recommend multiple creditors.
The PerfectHouse Team has three preferred creditors. Our approach is to let them compete to earn your trust, your business, and to save you money!
The PerfectHouse team has the experience and knowledge to guide you through finding your perfect home!