Buying a Home in Salt Lake City, UT

head_left_image

How to "Shop" Loans and Lenders Part 7 of 7 (Extras/Additional Information)

Mortgage MoneyMany Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate that is higher than they qualify for. Others unnecessarily pay too much in fees in order to get the lowest interest rate.

Shopping for a loan does not have to be difficult or complicated. The key is to take control of the process, get organized, and make sure you do it right.

Here are some basics on ONE way to shop for a loan. Click each link for more information on each topic:

  • Shop the lenders on the same day and at the same time
  • Make sure all the lenders have the same facts
  • Figure out the TOTAL Cost of the LoanSM
  • Don't skip the "shopping" even if you have a "friend" in the business or a "company special"
  • Ask for References!
  • A few extras (and feel free to ask questions here as well)

    If you know your credit status, lenders shouldn't need to pull it in order to quote you, so long as all lenders are quoting you based on the same credit worthiness (FICO Score, for example, if you have had it pulled for some other reason recently).

    You do need to realize that if you shop this way, and your credit score IS worse than what you told the lenders, quotes will need to be updated based on the new information. There are lenders who specialize in helping only "A" credit borrowers who may not even help you (or may not be able to help you at all) if your credit scores are too low. Likewise, there are lenders who may cost a bit more up front, but who are willing to spend the time and effort to help borrowers with lower credit scores either to still qualify for a loan today, or to guide you through the process of cleaning up your credit enough that you will qualify for a better loan at some point in the future. There is more work involved for lenders who are willing to offer those services, and they should be reasonably compensated for the additional work, if necessary.

    Cheapest is not always necessarily the best.
    Performance, professionalism and full service are important. Empty promises or promises that cannot be kept can actually be damaging to a Buyer under contract on a home.

    Yield Spread Premium -
    Yield Spread Premium is something many borrowers are not aware of until sitting at the Settlement table, if at all. The Yield Spread Premium is money given back to a mortgage broker in exchange for selling you a higher rate than you actually qualified for. The lender may feel they have actually earned this money because of extra work they needed to do on your loan. In my opinion, that is fine, so long as it is disclosed to the borrower up front that the lender will be charging a slightly higher rate than the borrower qualifies for in order to earn this "premium". 

    As a borrower, you should realize that the Yield Spread Premium can be used toward some of your other closing costs, allowing you to bring less money to the table at closing.

    Once again, I simply believe that the borrower should be aware of this so they can make an informed decision about whether or not they would rather pay the lender that extra cost up front, rather than be paying for it at a higher cost (via additional interest) over the next 15 or 30 years.

 

As advocates for the Home BUYER, one of the ways we protect our clients above and beyond what most traditional agents do is by offering to help them evaluate lenders and loan options using our TOTAL Cost of the LoanSM system.

If you have excellent credit and will be buying a $300,000-$800,000 home within 90 days and would like an agent who will work exclusively for you, make sure you get an Agent on YOUR side of the transaction! Make sure you hire an E B A!

Call us at (801) 969-8989 or contact us via the link on this page.

Exclusive Buyers Agents do not list homes and never represent Sellers. They represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2009 Homebuyer Representation, Inc. - "The Real Estate Agents on the Buyer's Side" TM - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

real estate agents on the buyers side

Comment balloon 0 commentsBenjamin Clark • August 01 2009 03:36PM
How to "Shop" Loans and Lenders Part 7 of 7 (Extras…
share
Many Buyers pay 1-3% too much for their loan in up-front costs, even after "shopping" for lenders. Some choose a lender solely based on which one has the lowest up-front costs, but they end up paying for it by getting an interest rate… more
You won't be spammed by me.
share
Just a note to all the visitors to my blog and websites. I don't spam. I don't send out email drip campaigns. If you contact me via my website, any response you get will be personally generated by me. If you have excellent credit and… more
Glut of Overpriced Homes Hurts Everyone
share
People who don't really need to sell their home should not put them on the market at ridiculously high prices. Prices don't go up 20% just because Sellers LIST their homes at 120% or more of market value. In order for prices to stabilize and… more
An Exclusive Buyer's Agent is the Only Way to Go
share
I recently transferred to Salt Lake City from California. Having owned a few homes, and also having dealt with various agents in the past, I did not relish the stress and hassles involved in the home buying process. I investigated my options, and… more
Don't Work with a Pushy Real Estate Agent
share
I saw this and realized just how different the experience is for clients of Exclusive Buyer's Agents than it must seem to most of the public who work with pushy real estate agents. British humor and real estate all in one short video clip. &… more
Beware the Bailout Buzzwords
share
Beware the Buzzwords. I had a recent experience with my current mortgage holder that makes me wonder if consumers are accepting "deals" from banks that are not "deals" at all. First, to be clear: I have equity in my… more
How to REALLY Get a Free Credit Report
share
Many "FREE" credit reports turn out to not be so free at all. Some people get charged a processing or handling fee, others get signed up for credit monitoring or other unwanted recurring services. The Federal Trade Commission… more
5 Reasons Utah is Weathering the Economic Storm
share
A recent ABC4 news report points out some reasons why Utah is weathering the economic storm better than other states. Diversification seemed to be the main theme. All of Utah's eggs aren't in one basket. Here are 5 of the examples given: … more
Owning Becomes More Attractive as Rent's Rise, Home Prices and…
share
Demand for rental homes and units in many parts of the country is on the rise as many homeowners who are unable to refinance their mortgages to today's lower rates because their property values have declined have sold their homes "short"… more
How is Earnest Money Applied at Closing?
share
Earnest Money is applied as a credit to you at Settlement. The settlement sheet is basically a balance sheet. The money you owe is on the top of your side (purchase price, closing costs, your portion of property taxes, etc. ) All the money… more
To Refinance or Not to Refinance?
share
Many homeowners are tempted to refinance at interest rates that haven't been this low since the 1970s. Well, should you? Or shouldn't you? The general rule of thumb has been to refinance if you can save more than 1% on the rate (with no… more
Utah Once Again Nations "Best State" to Live
share
Utah once again ranked as the Best State to live in overall based on a Forbes. com report of a recent Gallup-Healthways poll Utah ranked first for both Well-Being and Work Quality, and ranked second for Life Evaluation. It also ranked in the… more
$6, 000 Utah Grant for New Construction Not Just for First Time…
share
The State of Utah is offering purchasers of new construction a $6, 000 grant that does not have to be repaid. You do not have to be a first time home buyer to qualify, but there are a few limitations. Here are the basics of the "… more
Now on technorati
share
Just adding my blog to technorati. Pay no attention to this post. Technorati Profile more
An Equal Level of Representation for Home Buyers
share
Great Article in the New York Times Friday, featuring a good friend and colleague of mine, Ira Freireich of Long Island, NY. The article points out how many homebuyers are becoming more savvy and aware of how they can get the best level of… more
Dual Agency, Bad for Buyers (And Sellers! )
share
When I first began my career in Real Estate, I observed agents as they asked consumers to agree to dual agency. Sellers are often asked to do so when they list the home. Buyers are often asked to do so when writing an offer. When taking a listing… more
Home Buyers in Sandy, Utah Value Having an Agent on Their Side
share
We recently purchased our first home in the Salt Lake area. In choosing a realtor, we considered several options but ultimately chose to work with Benjamin Clark based on positive recommendations we'd received. We weren't very… more
"Impressed with Your Professionalism"
share
Ben, I wanted to take a moment and thank you for letting us help you with the purchase transaction for the Tanners. I was impressed with your professionalism and particularly the depth of your understanding of the closing process and the HUD-1… more
Think the Seller Pays the Real Estate Fees? Think Again!
share
Most Buyers are told that the Seller pays all the real estate fees. This is not exactly true. That the Seller pays the fees is semantics. Your cash (or loan) to buy the home is what gives the Seller the proceeds with which to pay their agent… more
Key Details of the $8, 000 Federal Tax Credit for Salt Lake City, Utah…
share
Key Details of the $8, 000 Federal Tax Credit for Utah Homebuyers Buy a home between January 1, 2009 and December 1, 2009. Get $8, 000 Federal Tax Credit when you file your 2009 Tax Return (or sooner, see below). This does not… more