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The Top Questions
Why Do Business With Us? Upfront Mortgage Pricing Policy We help you build business Credit
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Upfront Mortgage Pricing Policy
We provide upfront mortgage pricing
Our belief is that people who provide a service should get compensated a fair amount for that service. We however do not believe that just because a customer does not know any better that they should pay extra for that service. We also believe that a fee should not be tied to a loan amount as the work on a $50,000 loan is about the same as the work on a $300,000 loan. There are different types of loans with different degrees of difficulty and it is here where we believe compensation should differ. In order to better understand what upfront mortgage pricing means to you we feel that we should first explain how a loan originator gets compensated. When we talk about loan originators we are talking about all types of originators. Those that work with lenders get paid the same as those that work with Mortgage Brokers. Our company is a hybrid both a lender and a broker. Mortgage originators and brokers typically get paid on a commission basis. We receive payment in one of 3 different ways Origination Fee - (Sometimes disguised as points, mortgage broker fees and /or application fees) This fee is typically at least 1% for most originators. This is a percentage of your total loan amount plus any flat fees that may be hidden Yield Spread Premium - (completely hidden by a lender, sometimes hidden by a broker) This fee ranges from .5% to 4% of the loan amount. The average is about 2% - 3% Service Release Premium - (always hidden by the lender) A lender will get this extra fee (typically 1%) for closing a loan in their own name. We get this fee if we use our lender relationship and include it as part of our total compensation The typical fees a mortgage originator gets on a loan is typically 3% - 4% of the total loan amount. Most of the fee you will never be aware of, especially if your loan is originated by a lender (find out why) if originated by a broker you will find out about it, but by then it will be too late (find out why). The Yield Spread Premium and Service Release Premium is important to you because the amount paid on these items directly affects the interest rate you pay on your loan. The Service release Premium changes based on loan amount, the yield spread premium changes based on the rate that the originator "sold" to you. The higher rate he or she sells you the more money they make. It is very hard for most loan originators to keep your best interest in mind when their compensation is based on how high they can push your rate. Below is an example of how rates are presented to us, it is up to us to decide what rate to quote you. If you are unaware of what a fair rate is you may start your loan process with us. Many brokers earn a few extra hundred dollars during the last week before you close as that is the time when you are the least likely to go elsewhere because you may lose your house that you are contractually obligated to close on. Example: Sales price: Sales price: $157,900 Loan amount: Loan amount: $150,000
By working with us you will have the confidence that our fees will not change based on a daily whim, you will also know exactly how much compensation we expect to earn upfront and you will be able to verify that we in fact did earn the amount we agreed upon.
In order to keep you aware of your fees throughout the process we will provide you with the following upon your request.
1. Written Upfront Mortgage Pricing Agreement 2. Schedule of third party fees that we may incur that will be passed on to you. 3. Schedule of Rates and Yield spread premiums effective on the date we quoted your loan 4. Once your rate is locked we will send you our Rate lock confirmation (this will show the yield spread premium earned) 5. Lender fee sheet which will show what fees we asked the lender to apply to your loan (will show origination, yield spread premium, third party fees) 6. Copy of bank transaction showing amount deposited into our account 7. Copy of all 3rd party invoices
If you want to work with a company that is always upfront and honest please fill out the form below.
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