Get the Best LOWER INTEREST RATE Mortgage Quotes for Purchases or Refinance in St Louis, Missouri from Home Loan St Louis, Refinance St Louis, and Best Quotes Free

There's a growing wave of refinances sweeping certain segments of the business: payment-option ARMs. Too many consumers are opting to make only the minimum payment on these loans to increase spending money without regard to negative amortization.

Advice: If you decide to take advantage of the lower payment offered by a pay-option ARM, make sure you have a plan in place on how to reinvest the money you save to earn a profit. This way you can offset any negative amortization. Your broker should be working closely with your financial advisor or be able to recommend one to you.

Ask A Question

Subject: How Do I Choose the Right Broker?

Being bombarded by mortgage companies and brokers can become confusing, between interest rates, closing costs, points and experience – How can a person make an intelligent decision?

Advice: Key word “intelligent”. More often than not, most consumers make there buying decision on who ever rubs them the right way. While this may do wonders for your ego, you could end up paying for it – literally. When making a financial decision, that decision should be based on the numbers. But which numbers you ask? Most mortgage brokers are in the habit of “hiding” their fees – this is because most believe that customers would throw a fit, and they usually do. This comes from the fact that most customers have no idea what would be considered a normal fee, therefore they can not intelligently determine if they are being over-charged or not. Let’s establish a few facts first. First of all, the broker’s fee is a percentage of the loan. If you are speaking with a Loan Officer who works for a Broker, that Loan Officer is only getting a percentage of a percent typically 35 – 50%. That means the higher the loan amount, the more money the broker should make. This percentage is often called points, 1 point = 1 percent. What is fair? On a $200,000 loan 2 points ($4000 out of which your Loan Officer will make 35 – 50% or $1400 - $2000 far less than what a Real Estate Agent would make: 3.5 – 7% in their pocket) would be considered reasonable. Because this is a percentage, the number of point you are charged most likely will be higher on lower loan amounts and lower on higher loan amounts (the law limits this to 3% on conforming loans above 640 credit and 6% on non-conforming below 640 credit). Typically, you can expect higher points if your loan is a difficult file or will require special attention. Points are charged “up front” and represents the total of your “Loan Origination Fee”, “Mortgage Broker Fee” and sometimes hidden under the title “Loan Discount”. In addition, there are a number of third party fees that all borrowers must pay no matter who you go through (approximately $2500 before the broker has charged you a single penny!). So don’t let closing costs fool you. No matter what any broker or banker tells you, trust me – you will pay these fees. There is only one other way for your broker to get paid: “on that back” through what is called Yield Spread Premium (YSP). This translates into a higher interest rate for you and most likely will increase your monthly mortgage payments. This is completely hidden from the borrower and difficult to determine. Most brokers will use a combination of these: points and ysp. If your broker is fair, you should have lower points with higher ysp and higher points with lower ysp. Unfortunately, a few brokers will max out both fees. I refer to this practice as “head-busting”. So is it better to go ahead and pay the fees up front or on the back? If you plan to be in the home for more than 2 years it is always better to pay the points; if you will be there less than 2 years or if you are making a purchase and don’t have money for a down payment, it is better to pay on the back.

Always obtain a good faith estimate so that you may identify these fees. Also, be aware that brokers are not required to fully disclose this information on your Good Faith (although they should!) and it can be difficult to determine if it is just the old bait and switch. Beware of any lender who claim “no points” or “no closing costs”, since they have to get paid one way or another, you will be the one paying for it one way or another. Save yourself a lot of hassle and time by working with one of our professionals.

Market Conditions

Mortgage Industry Equity Composite

National Mortgage News has compiled a Mortgage Industry Equity Composite, intended to reflect developments in the mortgage industry. The Composite includes stocks representing all major segments of the industry: banks, thrifts, non-depository lenders, GSEs, mortgage insurers, title insurers, technology vendors, commercial real estate finance companies, builder-lenders, sub-prime and high-LTV lenders. The Composite is intended to be a representative sample only. The exclusion or inclusion of a stock should in no way be interpreted as a statement about the importance of the underlying company.

Mortgage Industry Equity Composite

Make sure you are getting the Best Rates. Find out how much you can save with a FREE Mortgage Analysis.

Click Here

Loan Types

Tools – Clicking on “Tools” may carry you away from this website use the “Back” button to return

| St Louis City Database | St Louis County Database | St Charles County Database |

Links

| National Association of Mortgage Brokers |