Big lenders and the Rate Quote Game
Bigger the Lender the more you pay
-- Big offices, ad costs and executive pay add up-and the only way for them to be profitable is to pass those costs on to their customers!
Funds for home lending flow through various sources to lenders & brokers -- but basically originate from the same mortgage-backed securities (MBS) market. Technology has changed how efficiently these funds flow -- and that change provides mortgage brokers access to nearly the same wholesale cost of funds as banks & big lenders without their huge operating expenses. What lenders charge you the borrower-- is that wholesale cost plus their required markup to be a profitable company.
Banks and big lenders constantly struggle to maintain a profit margin with the huge cost of their corporate offices, big advertising budget and enormous executive salaries. They need to squeeze every dollar they can out of each loan they close - and the only way to do that is to increase their gross profit margin by increasing the rate and lender fees they charge you! The end result is Mortgage Brokers who operate efficiently can charge you less and still be profitable.
Thinking about using Rocket Mortgage, Wells Fargo or BofA for your home loan? Think again! Big lender and bank mortgage companies do a poor job communicating with and taking care of their customers-no matter how much money they spend on ads and those online paid fake review sites to convince the public otherwise. Add in their expensive loan pricing and typical inexperienced loan officers and you have all the ingredients needed to make your loan experience an unpleasant one.
Here are just a few of the top brand retail lenders and how they rate out on a legitimate NON-LENDER controlled review site Trustpilot as of August 2022. Yes- unfortunately it’s true---many ad based or lender controlled online review websites fake their reviews –and often these sites use technology to suppress the bad ones.
Let’s pick on Rocket Mortgage as an example—Rocket has grown into the largest lender in the country spending 10’s of millions of dollars in advertising -- with thousands of call center loan officers who not only read from computer screen scripts when they talk to you – they utilize high tech to analyze and provide pre-scripted responses to your questions! Instead of hiring talented seasoned loan officers, Rocket’s business model is to hire inexperienced robotic sales people with minimal loan knowledge - all to fit their assembly line system.
No wonder most RE Agents think Rocket pre-quals letters are worthless. Just imagine all the potential problems a complex transaction will have when the loan officer is inexperienced and what that loan officer says and does is tightly controlled by a high-tech assembly line system and their company’s hard sell tactics.
Kinda sounds like a big high-pressure car dealership, doesn’t it? Ask yourself --ever had a great car buying experience at a sales game playing car dealership?
The Loan Officer- not the Lender --The most important choice is the right Loan Officer
Any company can have great advertising gimmicks --with slogans like "Rocket Mortgage" -- and falsely state they have the best rates available --- however it’s the Loan Officer who makes the loan process as successful & stress free as possible. If the loan officer is inexperienced, lazy, deceitful —or works for a mediocre lender -- your loan experience can be a huge hassle that costs you time, money- and even result in a last second turned down loan!
Putting your needs first should always be the #1 priority. Do you really believe an on-line or a bank loan officer cares more about your needs-- or what their managers want them to do-which is sell, sell, sell?
Shopping Rates? – Don’t get Tricked!
Get 3 quotes and compare-right! –Sorry! -That works only if the sources of the quotes are honest -and all quotes are provided within a few minutes of each other - rates can change too quickly for any rate quote a few hours apart to be fresh and accurate!
You know what us experienced loan pros call the online websites that provide “so called” accurate rate quotes? The liar’s club!
The number one goal of all those online rate quote folks is to attract your attention- much like how a car dealership advertises that one car that’s $10k less than other dealerships-but always seems to already be sold when you show up at the dealer!
You deserve the best loan pricing available for your situation and the best service from a competent easy to communicate with loan officer. One who has your best interests as their primary goal—not selling you into a loan that doesn’t fit your needs.
There is no substitute for experience, knowledge and integrity. A well-connected mortgage broker is a great asset to help you navigate through the maze of home loan options and helps to make sure you receive the best rate at the lowest cost available!
Thanks for reading! My name is Dennis Hughes -President of Lend4less. I can show you how to get a Hassle-free Lower Rate and Save Money on Your Mortgage!
Allow me to show you how it can feel to work with a very experienced loan Pro! One who cares more about your needs than maximizing profits.
Over 30 years in the mortgage business -- 10,000 plus closed loans as a loan officer, sales manager and company owner - I use all that experience to reduce hassles for you --and save you money!
Purchase or refi including cashout loans
Loan programs include conventional, VA, FHA, USDA zero down, Jumbo and manufactured homes-all at rock bottom rates with closings as fast as 12-14 days.