Parker Mortgage Tip: Use a Bank or Broker for Your Next Colorado Home Loan? (Cont)
ByIn today’s Parker Mortgage Tip, I would like to further explain the difference between a Loan Officer from a Bank and Colorado Mortgage Brokers. They can significantly impact your next mortgage Parker Colorado or Colorado home loan.
Interest Rates:
Banks Usually Have Higher Rates: As you can imagine, banks have large overhead expenses. They have to maintain and finance their own “Brick and Mortar” buildings. Banks also have to pay salaries for their employees, health care benefits and 401K plans, etc. Don’t forget marketing expenses. Those bank TV commercials aren’t cheap! Banks start off in the “Red” each month due to all these expenses. The way for them to stay afloat is to make money by charging higher interests on Parker mortgages and Colorado home loans. They already nickel and dime you for their normal bank fees such as check return, ATM, insufficient funds charge, etc, but they really make their BIG MONEY by charging you a higher interest rate on Colorado home loans. Whenever you get a higher interest rate on your mortgage Parker Colorado or Colorado home loan, you can pay tens of thousands of dollars more than you should over the life of your Parker mortgage.
Colorado Mortgage Brokers Usually Have Lower Rates: Most of the Parker Mortgage Brokers I know work from home. I do and I enjoy it. There’s almost no overhead so we can provide you with a lower interest rate on your mortgage Parker Colorado or Colorado home loan. Banks rely on us! Since Banks don’t pay us a salary or our marketing costs for bringing them a mortgage Parker or a Colorado home loan, they pay us a fee. As a Parker Mortgage Broker, I will usually beat the Bank’s closing costs and/or interest rate by at least .125% to 25%. That is lot money that you can save on your Parker Mortgage over the life of a Colorado home loan.
Qualifications:
Banks Make Their Own Standards. Whenever you go into a bank or credit union, the building looks fantastic. All the bank employees are dressed very nicely and everything looks so professional. Let me use a simple example. When you walk into a high end car dealership, you expect a certified, well trained, experienced mechanic to properly diagnose and service your Mercedes, BMW, etc., right? Shouldn’t you expect the same from a Bank? Unfortunately this may not be the case. Banks can hire ANYONE and train them as little or much as they please. There is NO governmental oversight! Let me ask you a simple question about your own experiences when you got a new job. How much training did you actually get? Did you end up learning most of your job on your own? Were you paid what you were worth? Banks, like most other businesses, will usually pay the least amount that they get away to get the job done. My first job in the mortgage Parker Colorado and Colorado home loan industry, I was paid about $350 per loan. It wasn’t a Bank, but the practice was the same. I soon learned that the lender was making about $5,000+ per Colorado home loan and I was being paid “Peanuts”. I also discovered that the lender was significantly overcharging their borrowers for their Parker mortgage Colorado or Colorado home loan. I resigned. I would not participate in any scheme to rip people off!
Colorado Mortgage Brokers Have to Adhere to Higher Standards: Colorado Mortgage Brokers had to become licensed almost two years ago in order to originate a Colorado home loan. Bank and Credit Union Loan Officers don’t have to be licensed! As a Parker Mortgage Broker, I had to:
- Be Fingerprinted and Pass a Background check by the Colorado Bureau Investigation
- Secure a Surety Bond for Mortgage Broker for $25,000
- Carry errors and omissions insurance for $300,000
- Participate in 40 hours of education that covered Federal and State Law, mortgages, and Businesses and Trade Practices
- Pass a comprehensive two-part written Colorado Mortgage Licensing Exam
- Meet and Adhere to all of Colorado Mortgage Broker current licensing requirements.
Go back to my first posts about DORA, you will see that it isn’t easy to achieve the elite status of Colorado Mortgage Brokers. DORA inactivated 4,560 licenses in August. Most people can’t meet these high requirements. Bank Loan Officers are exempt and I bet you that they are not trained nor qualified to properly advise you.
Ironically one of my best referral sources as a Parker Mortgage Broker is the Banks. When borrowers go to the Bank and realize that the Loan Officer (a lot of times a young kid) didn’t have the foggiest idea of what he/she was doing and/or they didn’t have the loan program that they wanted, they called me.
The reason for these posts is that I not only want you to get the “Right” mortgage Parker Colorado or Colorado home loan but also a “Good” one.
The next Parker Mortgage Tip will summarize these four major differences because they are extremely important when you start deciding on who will help you with your mortgage Parker Colorado or Colorado home loan.