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ALPHA MORTGAGE MAKES FINANCING MORE CONVENIENT FOR BORROWERS ¨ Same-day pre-qualification ¨ Professional advice ¨ Competitive rate shopping tailored to your financial situation ¨ Convenient application process ¨ Access to a variety of lenders and lender programs ¨ Professional, secure computerized loan processing ¨ Industry knowledge ¨ Good Faith Estimates of closing costs ¨ Ability to re-direct the loan if needed ¨ On-going professional relationships with lenders ¨ Alternative solutions when needed UNDERSTANDING THE ROLE OF YOUR MORTGAGE BROKER An important role of a mortgage broker is to arrange for your loan to be funded by an independent investor or lender (“lender”). It is important to realize that your mortgage broker is not an employee or representative of the lender, but your agent. Your broker has a duty to represent your interests at all times. As such, the mortgage broker fees for professional services are paid by the client, usually at closing. The lender’s role, on the other hand, is to provide financing. Therefore, you should look solely to your mortgage broker for information and assistance concerning the terms and conditions of your loan and any associated fees and costs. THE COST OF YOUR LOAN Your loan transaction will involve a variety of different fees and charges. Some of these are charged by the lender, some are charged by your mortgage broker, and some are charged by third parties such as closing agents, attorneys, title companies, insurers, appraisers, home inspection services, etc. An initial Good Faith Estimate is provided by your mortgage broker and is an attempt to itemize the cost of the fees associated with your loan. At or before closing, the lender will provide you with a subsequent Good Faith Estimate that is a final statement showing the actual fees and charges that will be assessed in your loan transaction. “NO FEE” LOANS You should be leery of any lender or broker who offers a “no fee” loan. All loans have fees attached. A “no fee” loan is a loan in which the actual fees associated with a loan are “hidden” in a higher interest rate is charged in lieu of “fees.” The true cost of the “hidden fees” associated with this type of loan is spread across the full term of the loan, ultimately costing the borrower more than if the actual loan fees were paid at closing. The costs of your transaction may also vary according to the loan program you select and interest rate and terms, and any changes you decide upon during the loan process. Do not hesitate to ask your broker if you have any questions about any specific charges. BROKER COMPENSATION In today’s lending environment, your and your broker should work together to structure your loan to best meet your goals and objectives. If you would rather pay less up front, or if you do not have much cash available, you may finance your fees and costs through your loan, thus effectively creating a higher interest rate (“APR”). If you would rather have a lower interest rate, you may pay higher up-front points and fees. You should review the options with your broker and agree upon the terms of the loan (including the interest rate, points, and fees) and the amount to be paid to the broker. REBATES Many lenders provide a range of rates for their different loan programs. It is the custom in the industry to offer mortgage brokers “rebate fees” as an incentive for the mortgage broker to quote a client a higher interest rate than that for which a client may otherwise qualify. For example, a lender may offer a range of rates beginning at “par” - no cost or fee to the borrower- to other rates in excess of par where the borrower pays a higher interest rate. Normally, in exchange for the borrower agreeing to pay a higher interest rate, the lender agrees to pay the mortgage broker, usually outside of escrow, a certain fee or rebate based on the value of the loan. Many times the mortgage broker does not divulge the fact that the borrower could have had a lower cost interest rate on the loan negotiated by the mortgage broker because of the “rebate fees” that the broker retained. ALPHA MORTGAGE NEVER ACCEPTS OR KEEPS LENDER “REBATE FEES.” We make a commitment to our clients that we will negotiate the lowest rate that our clients qualify for on the date that they lock their loans. We will explain the different costs or rebate options associated with published lender rates and how they effect monthly payments. If the loan rate accepted by our clients earns a rebate, Alpha Mortgage credits that rebate to the client at closing. We never take rebates from lenders outside of closing. We are committed to serving our clients first! You should discuss with your mortgage broker how to structure the interest rate and the amount of the fees and charges in the way that best suits your circumstances. Your mortgage broker can answer any questions concerning broker compensation and other fees and costs during the loan process. Remember, at Alpha Mortgage we are only a mouse click away 24/7.
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