their rates, suggests that when lenders compete, you still may not get the
best rate. The lawsuit alleges that lenders post rates so low they can't honor them.
Then when the borrower is committed to the loan, they switch him or her to
a higher rate. That higher rate is often worse than the honest rate offered
by other lenders.
This all starts out by a home owner going online to shop for a new mortgage
loan. Most of the time when online shopping for a loan you come across
what is called a Lead Broker Site. Lead Broker Site's usually advertise
saying things like 'When Lenders Compete You .........etc. etc.' Lead
Broker site's usually push the idea of shop for the best rate, or Let
lenders compete for your business.
Lead Broker site's after they capture your information online what they do
next is sell your information, usually to the highest bidder. An online
lead's price can range anywhere from $10.00 to $120.00 per lead, and
depending on the company.
Now here is where it gets good. The Lead Broker site's will usually sell
your information anywhere from 1 to 4 times, and even more. This means
that the home owner will be getting a pluthera of phone calls from Lenders,
and brokers all wanting to earn your business. Most of these companies will
tell you exactly what you want to here as well. If you were to ask the
question 'What's your rate' they would probably quote you a rate right then
on the spot. If not they will take down some brief information and then
put a fast quote together without even knowing your true financial goals.
Most websites that advertise the offer of "let lenders compete for your
business" or anything similar to that don't necessarily guarantee that you
are going to receive the lowest rate or the best deal. By submitting your
information to these types of websites or companies you are really
submitting your information to a company who provides your information to
the mortgage companies who will pay them the most money. Therefore, the
companies that are buying your information from these lead companies have
to recoup these costs somehow and they will generally do that through "junk
fees" or higher interest rates than what you might actually qualify for
Keep in mind as well when multiple mortgage brokers run your credit ( if
you are giving it out to everyone) you are hit with multiple inquiries
which could lower your actual FICO score. Lower scores limit your ability
to qualify for certain loans and also may increase your interest rate which
could cost you thousands of dollars over the life of the loan.
My point is when shopping for a mortgage loan through lead broker sites
keep in mind the following and remember, this is just advice for your
protection:
First, you have to make sure you're comparing apples to apples. Unless
you have a long discussion in regard to income, assets, credit, short and
long term goals with each broker and hang up knowing exactly what program
you're talking about, it will be impossible to get a good comparison...I
can tell you this, the lowest rate out there is only on a program that
isn't the best program for over 90% of borrowers, so just shopping a rate
may end up costing you more..
Second, find out what program is going to help you realize your financial
goals, understand the program and how it's going to get you there, take
nothing on faith...It only costs you time to get the best deal!
And last of all if the program sounds to good to be true, it probably is.
If you were to follow some of the complaints filed by some of the home
owners even here in Utah, you would find this same advise from the state.
A good mortgage broker is not always going to tell you what you want to
here. He most likely will not quote you a rate right their on the spot.
The reason why is that their are so many loan programs available that its
hard to just throw a rate out their, especially not knowing the borrowers
true financial situation.
One last peace of advice when shopping rates. Look for an actual mortgage
company online instead of a lead broker site. Do your home work on the
company, and the loan officer. Yes get a quote, but learn what type of
program and qualifying guidelines are required for that program. This
takes a bit of work but can save you lots of time and even money in the
long run.
If you have any questions, please feel free to ask?
Ed Bates
Wasatch First Financial
801.330.4964
http://www.mloans.net/
Apply online for your home mortgage today!
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