JohnsBlog (articles, news, thoughts, advice)

Hey folks.  Time to address something that is on everyone's mind when shopping for a mortgage.  Fees, closing costs, and rates.  It seems these days few people understand how the mortgage business works, and many people seem to want the exact same thing...great service, the lowest rate, and no closing costs.

Before I get started, if you are one of my valued clients (and if I've done a loan for you, or have worked with you, chances are that you fit into this group!!) please dont worry about this blog.  Chances are you either understand the business, understand the term "value", or have clearly seen the difference between doing business with the lowest bidder compared with a true mortgage professional.

So here goes.  There are HUGE companies out there.  I mean GIANTS.  You see their advertisements everywhere-- online, on billboards, on TV, in the mail--and you probably see at least one of them everyday.  A little enlightenment on how these companies operate (for the most part)....they generally hire inexperienced individuals, run them through a pre-set training schedule, then put them out there to handle your financial future.  Often times, these are appealing lenders simply because of name recognition or the fact that they have low rates and low fees.  Often times, you sacrifice service and the knowledge a true mortgage professional can offer, and the few hundred dollars you save up front gives you headache for years, and whats worse, can cost you more in the long run.  Also, banks...banks dont charge points...whats with that?  Well, as of right now I can offer a 6.5% and the lender will pay me almost a full point...without a client ever seeing this point, except for in very small print on their final HUD.  A bank I was competing with tonight offered a potential client a 7.125% with NO origination fee!!!! AMAZING!!!!  A 7.125% I give today pays 2.6 points on the same loan.  On a $325,000 loan, thats $8,450...looks like closing costs to me.  And if this loan were to be held onto for a long time, you can assure yourself you'll be paying MUCH more than the "closing costs" you saved on in the higher interest rate.

When you pay a fair price up front for the lowest available rate on the market, you save in interest over time, or if you plan on your loan being short-term, take a slightly higher rate to save up front costs.  A true mortgage professional will know what will benefit you the most for both the short and long-term.  Also, please dont ever, ever, ever take the "low rate, no closing cost" lender.  If it sounds too good to be true in this business...it is.  I've had so many clients return to me after going to a cheaper competitor and wasting a month of their time and a ton of paperwork to be turned down, losing money on an appraisal, and sometimes even hurting their credit in the process.  There is no such thing as a free mortgage...there are always 3rd party fees (Uncle Sam has got to make something!), and a real mortgage professional who is putting in time and the best possible effort to ensure a bright financial future for you...isn't going to do it for free.  I may not be the cheapest mortgage professional to use, but I can guarantee you get a great deal on what you get.  I provide the best product I can for each client's individual situation, help plan for future goals, whether it be investments or retirement or kids going to college, and Im very (sometimes brutally) honest about programs available and whats going on with every step of the process.  For those of you who have had a question at 7am on a Sunday or 11pm on a Wednesday evening also know that I'm available 24/7 to my clients, if no immediately, within a few hours at most. 

This may seem like a rant, but Ive gotten a few calls tonight for people looking for the 6% 30-year fixed rate mortgage with no points and extremely low closing costs, and it dawned on me that many people may not realize that they're asking, unfairly, for the impossible, and not giving anyone a chance to help them, save the unethical professional who will quote lower than they can give in order to bait and switch someone.  There is no such thing as perfect deal without spending a penny.  What there IS readily available through myself and Stonebridge mortgage, is great mortgage products with service from professionals who know and follow the industry, at a very fair price.  If thats not what you're looking for....I wish you the best of luck with whoever you choose.