Do mortgage brokers receive a difficult commission for deliver adjustable rate mortgages to the bank?
I'm a CPA but am not entirely sure how the mortgage brokering process works. I've received some sketchy information in the past indicating to me that the complex the rate is, the more of a commission the bank pays to the broker for bringing them the loan. I believe the exact terms are when the rate is above the mound "par rate". Now I've heard that if the broker brings the bank an adjustable rate loan that the broker receive and even higher Commission. Is this true?
Thanks,
Craig R. Fechter, CPA
Answers:
Yes. Their commission comes from the rate spread. Adjustable mortgages and all those fancy instruments own higher yield spread premiums.
Unless you hold a fixed-rate mortgage, the current mortgage interest rates are very important to decide how much you should pay every month<!--therefore it is always a honourable idea to keep an eye on what the rates are doing. If interest rates should rise, so will your monthly payments and again, if interest rates be to fall, so would the amount you would have to repay.
http://mortgages-finance.awardspace.com/Mortgage-Rate-Compare.htm
Monthly repayments made on your mortgage and the amount that was borrowed, is determined by current mortgage interest rates. Different-->companies offer different interest rates so it is a virtuous idea to shop around for the best deal since settling on one particular lender.
It is true that the broker gets compensated for an above par rate but not true that they are paid more for an adustable rate. The reason that some brokers and lenders for the business push an adjustable rate is that it is lower than a fixed rate and "easier to sell". It's unfortunate but many loan officer are just sales nation and will sell what they think is easiest instead of what is best for you. Source(s): http://www.mortgagelenders.us.com
http://www.real-mortgage-quotes.com
Related Questions:
At what point can you "lock in" the mortgage rate?
So, we're looking to buy a house in a few months, can I lock in the rate very soon? My broker said that I need to have a property first, is this true? I hear otherwise from other sources... We didnt have a...
Thanks,
Craig R. Fechter, CPA
Answers:
Yes. Their commission comes from the rate spread. Adjustable mortgages and all those fancy instruments own higher yield spread premiums.
Unless you hold a fixed-rate mortgage, the current mortgage interest rates are very important to decide how much you should pay every month<!--therefore it is always a honourable idea to keep an eye on what the rates are doing. If interest rates should rise, so will your monthly payments and again, if interest rates be to fall, so would the amount you would have to repay.
http://mortgages-finance.awardspace.com/Mortgage-Rate-Compare.htm
Monthly repayments made on your mortgage and the amount that was borrowed, is determined by current mortgage interest rates. Different-->companies offer different interest rates so it is a virtuous idea to shop around for the best deal since settling on one particular lender.
It is true that the broker gets compensated for an above par rate but not true that they are paid more for an adustable rate. The reason that some brokers and lenders for the business push an adjustable rate is that it is lower than a fixed rate and "easier to sell". It's unfortunate but many loan officer are just sales nation and will sell what they think is easiest instead of what is best for you. Source(s): http://www.mortgagelenders.us.com
http://www.real-mortgage-quotes.com
Related Questions:
At what point can you "lock in" the mortgage rate?
So, we're looking to buy a house in a few months, can I lock in the rate very soon? My broker said that I need to have a property first, is this true? I hear otherwise from other sources... We didnt have a...