What Is Your Rates and Fees?

I hear this all the time. Do you know what I hearing when I hear this? I hear the client asking what am I getting for my money? What service are you going to provide? I need more information.

I can't tell you how many lenders there in this market that have really low rates and fees. But I caution you when dealing with these companies; you will get what you pay for and you do sacrifice something to get the absolute lowest rate and fees. Many of these employees that work for them are paid by the hour and do not know a thing about the guidelines or different solutions that are available to you. They enter your information into a system that tells them whats best. There is no listening involved only data collecting.

These companies have a habit of selling not only your loan, but the servicing rights to your loan as well. What does that mean? The means your loan will get transferred to another lender, and possibly another lender after that.

Take Walmart for example. Walmart has the lowest prices but service is horrible proving that all they care about it sheer volume. You are not a customer to them, only a number. If they sell enough at a low price, they can make a profit.

H&R block is another example. What do you get with H&R block? You get the lowest tax preparation fees but do you get professional service? My point is when asking a lender for rate and fees, find out about who you are dealing with. Is your lender only a mortgage company? Are they a bank? Do you trust who you are doing business with?

What happened to service? To building a long-term relationship with your lender that not only stops with your mortgage; but also your checking, savings, investments, and insurance needs. The subprime mess is an example of not advising clients in the proper way on what solutions are best for them. Its our duty as originators to discuss the full details of the loan, including discussion on debt to income ratios, the responsibilities of a home owner - especially first time homebuyers - benefits and disadvantages, and resources to educate our clients.

Don't just settle for lowest rate and fees, please consider the long-term relationship with your originator and lender. Find out if they sell the servicing to their loans. They will have a servicing disclosure that will disclosure how many loans they've sold the servicing to in the last 3 years.

When shopping for a mortgage, shop for a professional. Why would you originate your loan with someone who doesn't even know how the market works? You are making the biggest purchase you'll ever make so make sure you dealing with a professional.

Ask questions, be informed of your choices, and make sure you trust your originator. Most lenders will have similar programs and similar rates, so think about the relationship. Shopping for a mortgage is not just about rates and fees.

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