Vancouver Wa Real Estate - Elite Realty NW

Most people here in Vancouver, Washington are not aware that there exist 3 major sources for getting a mortgage on their new home:

1)     Retail Banks

2)     Mortgage Brokers

3)     Mortgage Banks

There are distinctions for each and you should know these before you start shopping for a home loan.  With rates rising, it's very important that you have the best mortgage source available as you look to buy Vancouver, Wa. real estate.  Here are the differences:

Retail Banks -  When you purchase a new car, do you expect to pay the lowest price by walking off the street into a large dealership?  Usually not.  Each major bank does do home loans, however you will pay ¼ - ½% more on the rate when fees are matched up with a Mortgage Broker or Mortgage Banker.  Retail banks will normally be the most expensive source of funds. Mortgages aren't their specialty and they don't have access to many programs that may be a better fit for you and less expensive.

Mortgage Brokers  - Most Loan Officers today are Brokers, which mean they put borrowers and banks together after shopping their list of connections.  Due to volume, they can get the same loan from a retail bank at a slightly lower rate for the borrower.  Brokers are simply a middleman service, as they do not ever touch the funds, nor are the loans funded in their name. Brokers will get paid partially through Yield-Spread-Premium (YSP), which is a kickback from the bank to the Broker for selling a higher rate.  YSP MUST be disclosed on all Broker Good-Faith-Estimates BY LAW ... remember that when comparing. Also, you should be aware that many brokers are required to charge an origination fee as well as other fees. Keep your eyes open for these additional fees.

Mortgage Bankers  - A small percentage of Loan Officers are Mortgage Bankers.  They function similar to Brokers with one major difference ... they actually loan their company's own funds.  A Mortgage Bank will fund a loan in its own name, thus taking on a much larger risk than a Broker.  As a reward for this risk, a Mortgage Bank can provide loans at a lower rate, and with lower fees. Combine that with the speed of having in-house underwriting and funding, and you'll find that a Mortgage Bank will be the best deal for the borrower 99% of the time.

There is one other piece of mortgage advice that I can share with you to help you get ready to shop for a new home in Vancouver, Washington, SHOP AROUND! I am amazed at the difference in prices out there. When the time comes, call Janice or me for a referral to a lender who you can trust.

Calculator photo: asterisco