I have a client with a jumbo loan of iver 745k that with all his closing cost ppp and broker fees included. he wanted a 30 yr fix 10 i/o at a rate of 5.75. In todays market he would have to buy down the rate for like 1.07 percent. Ok so im charging him the broker feewhich is 1.25 and he is paying the bank to get that rate in the fives. Now he went to anotherlende and hat ender is using the old ican give you better cost bait. the borrower is a 720 FICO with good reserves of abot 29000 dollars he doesnt want to spent to much on buying down the rate. the other guy is telling him that they can do a 5.875 at a $9000 dollar flat fee. FOR TOTAL CLOSING COST. THATS IMPOSSIBLE
2007-02-24 14:47:04 · 6 answers · asked by 4walls 2 in Business & Finance ➔ Renting & Real Estate
its a rate and term refi. Im doing him a favor of getting him out of a Neg am. I made sure he got an appraisar that could give him the value he needed. Which I shopped around for til I got the one who could do it. On my charges Im shwing him my Broker fee his prepaid interest his lock his discount fee, his 3rd party fees. And I even hooked him up with a Tax consultant so they could go over his savings. He was concern with monthly payment he didnt know if he was going to be there more than 10 years, so I offered him the best cheapest rate which was a 5.75 10 ARM which only cost 1.07 and then I showed him a 5.75 30 fix with a 10 I/O at 2.25 cost. HE is concerned about having a low payment a low rate and checosts. HE wants his cake and eat it too.
2007-02-25 06:41:42 · update #1
The old bait and switch tactic is a hard one to compete against. The new broker will likely even give him a good faith estimate based upon the scenario he is trying to lure away your client with. Of course he will raise it to actual when theres no time left and use the typical excuse, well it was after all an estimate, not a guarantee. I never charge more than a 1% broker fee regardless of loan size or applicant issues with credit. Even dropping that .25% wont help you and reducing a fee, once given, opens up a floodgate of renegotiation issues with many rate and fee shoppers. I would go over both GFE's and TIL's with the client and show him where his chances stand with each loan being able to fund as agreed. It is very likely the other lender has underestimated some 3rd party costs and not added in a few others. Another issue is rate lock, can you lock the rate you quoted long enough to close and fund, can the other lender ?
They may be giving him a short lock rate and then raise the rate later and blame the delay on a late arriving appraisal. If they truly can do the loan they are baiting him with, I would find out who they are brokering it to, and get them on your lender list.
2007-02-24 15:16:18 · answer #1 · answered by Myron 4 · 4⤊ 0⤋
I can give a very good answer but first could you please inform us here as to whether this is a purchase loan, a rate and term refi, or cash out refi ? There are too many variables to answer for all 3 possible scenarios. As to the part of the question regarding a competing lender I can also easily answer, and will, when you add the additional details.
2007-02-24 23:26:17 · answer #2 · answered by Kevin H 4 · 3⤊ 0⤋
It sounds pretty low - a very discounted jumbo loan right now has to be aroung 6.250 and i/o would add at least an 1/8 I dont buy it.
What Bank is the other guy with? Can you get a copy of their rate sheet?
Build rapport, dont let it go
2007-02-24 22:54:21 · answer #3 · answered by jojo 1 · 0⤊ 0⤋
Sounds like theres more to the story. Theres something really wrong with that scenario. Contact these guys, they know jumbo loans really well. Maybe they can help smoke him out.
http://www.luxuryhomeloans.net/
2007-03-04 20:22:44 · answer #4 · answered by RealEstatePro 1 · 0⤊ 0⤋
have him pay the title insurance
2007-02-24 22:54:57 · answer #5 · answered by scott n 2 · 0⤊ 0⤋
So what exactly is your question?
2007-02-28 15:20:21 · answer #6 · answered by Jay S 3 · 0⤊ 1⤋