Rates are flat today. Ben Bernanke is speaking again today about the state of the economy. When Ben speaks the markets listen. Be prepared for an extra volatile market today. Today’s comparison mortgage rates with no lender fees are 4.5% on a 30 year, 3.625% on a 15 year and 3% on a 5/1 ARM. (click here for details).
I think today’s episode may be my favorite. Not only did Chase Bank accidently report one of their customers dead and screw up their credit, but we also answer a great question about how your mortgage loan officer gets paid.
You definitely want to see this. (hint, we suggest a new slogan for the Chase logo)
Check it out in today’s action packed episode:
I know I am not perfect, but how does a bank make a mistake and declare someone dead? That is what happened to a Florida woman. Chase Bank made an error and told the credit bureau she was deceased. Wow! No wonder why banks are having so many troubles. If you want to check out the full story click here.
Today’s question is from a person on Quora.
What percentage of the loan value do mortgage brokers get paid on closing the loan?
Click here to see it Great question fellow Quora user! Here is how the new compensation structure is set in place for loan originators.
Today I’ll offer the simplified version, but it should be more than you’ll need to make a decision on what kind of loan officer you want to work with.
Mortgage Loan Officer Compensation 101
Originators have to decide how much they want to make on each loan. Once they do that, the lender they work for will build that compensation into what they call “margins”. Margins will then be fixed and will determine rates and the costs of your loan.
This is why it’s so important to shop around, find out what the best rate is, and then go find a lender to give you that deal. The truth is that each loan originator has a different set of wants or needs. One originator might say “I won’t do a deal for less than two points.” This originator would have to offer higher rates and costs to get his or her two points.
I like to call these type of originators “Dinosaurs.” They have very high margins and only do a few loans a month for a few people that must not have the internet. (Why else would you pay that much?)
Another originator right down the street may have a different set of wants or needs. This originator may decide to offer the lowest possible rate and costs and still make a buck while going for more volume to cover their costs and provide an income. I like to call this originator “the future”. This method is a little more work, but will give the client the best possible deal, create a referral network from very happy clients and Realtors, and make a better living than a dinosaur in the long run.
That’s how it works!
The originator picks their comp and then sells that rate. The question is do you want to work with a “Dinosaur” originator or “The future” originator? I think you get the point!
Congrats, you just passed Mortgage Loan Officer Compensation 101 with Professor Cox.
Now go out there and get the best deal!
Hey, if you get a chance, I would love it if you could help me in my mission to bring transparency to mortgage lending by sharing today’s episode on Facebook or Twitter. Let’s change the way people shop for a mortgage…forever!
See you tomorrow!
PS. To ask a question, get advice, or find out what your lender is making off your loan, just post a comment below. Daily comparison rates, calculators, and other cool features are available in the free Rates in Motion LoanApp by going to your smart phone and clicking on this link, activation code is 9203780002