Mortgage Companies, Ken Fisher Realtors

A Mortgage Company can save you money, cost you money or even cost you the potential purchase of the property that you wish to own. There are many mortgage companies to pick from. Some are excellent, some are good, some are fair and some are quite poor in what they do … but most do make a rather hefty profit. Keep in mind that you must consider more than just interest rate when considering which loan package to accept. Some companies offer rates that are too good to be true … and they are! They will put so many charges on your closing statement at the closing that you will wish you had never heard of that company. And watch out, too, for companies that offer to finance all of your costs (both in new purchase loans and re-finance loans). You may not notice the excessive amounts of those costs until it’s too late because they were built into your loan amount.

You should consider interviewing at least three companies and literally demand a Good Faith Estimate (GFE list) of the fees that they will charge you as well as a time table for processing your mortgage through until the actual closing. Compare the fees between the mortgage companies … question the differences ... recent Government action has made this activity much more understandable. This is extremely important, especially when dealing with a builder's preferred mortgage company.

You should also watch out for the Pre-Qualification Letter and the Pre-Approval Letter. In our opinion, the Pre-Qualification Letter has so many loop holes that it is useless ... most real estate companies no longer accept them. The Pre-Approval Letter can be a valid document but can also be a Pre-Qualification Letter in disguise ... check out the exceptions list before proceeding ... perhaps you should proceed to another mortgage company.

Also, keep in mind that mortgage companies are not, by law, allowed to collect illegal kickbacks and unearned fees. HUD has stated that builders, lenders, mortgage companies and title companies CANNOT mark up third-party charges such as appraisals, settlement fees, credit reports, flood certifications, pest inspections, postage and courier costs, surveys, title work and title insurance.

The Federal Real Estate Settlement Procedures Act (RESPA) prohibits payment of any fee, kickback or thing of value for the referral of Real Estate business.

You should also get a list of the fees that the mortgage company plans to charge to the seller … the seller may refuse to close if those fees are exorbitant. Check those fees for reasonability. We advise that you require the mortgage company provide a list of those fees to the Seller by certified mail at the time you make mortgage application.

Watch out for JUNK FEES! They can be added on by the mortgage lender at the last minute to the Buyer, the Seller or both. Some of these fees are unearned in some respect, or duplicative of other fees (with just another name), or simply just not justified by the service provided. These fees are subject to the Federal Real Estate Settlement Procedures Act (RESPA).

Some Real Estate Brokerages add junk fees to the Seller which are typically considered JUNK FEES and potentially a violation of RESPA. You do not have to pay any undisclosed fees … just walk away from the transaction. The Brokerage will typically waive the fee under pressure.

Watch out for the Appraisal JUNK FEE! Typical full appraisals cost between $300 and $375 for a first mortgage loan. More and more appraisals are not FULL APPRAISALS. Exterior only appraisals and Drive by or Windshield appraisals cost considerably less … some mortgage companies will charge the full price and pay the appraiser between $50 and $100 for the task.

Other RESPA violations include failure of the mortgage person to give you a Good Faith Estimate and the RESPA Information Booklet “Buying A Home” either at the time you make mortgage application or within 3 days thereafter.

Real Estate companies, Builders, Mortgage companies, Title companies, Appraisal companies, all must disclose any ownership between them in writing in advance or they are violating RESPA. You do not have to deal with their various divisions. We recommend getting price quotes from various providers.

You should talk with Ken Fisher, a Consumer-Certified Real Estate Consultant for advice and recommendations about how to secure a reputable mortgage company. You may order a Mortgage Guide from the Consumer Information Center at 1-888-878-3256. You may also order a Homebuyer’s Mortgage Kit from www.hsh.com.

Use These 20 Mortgage Calculators to Calculate Your Payments

Please note: It is understood that we may refer a Buyer, a Seller or any user of our services to other professionals, service providers or product vendors, including lenders, loan brokers, title insurers, escrow companies, inspectors, pest control companies, contractors and home warranty companies. We do not guarantee the performance of any service provider. Buyers, Sellers and users of our services are always free to select providers other than those referred or recommended to them by our company.