Banks make money from the interest you pay on your mortgage. As a result, they inhibit their loan officers from refinancing your loan into a lower rate…after all it will cost them money in the long run. That is one of the main reasons we are an independent mortgage broker. By not working for just one bank our mission is clear--to ensure you have the best mortgage possible. At San Juan Mortgages/Arbor Financial Group, we have invested in industry leading software that manages your mortgages and notifies us when we can drop your rate. This type of ongoing mortgage management has saved our clients countless dollars over the years.
What is the Advantage of using us vs. your typical bank loan officer?
Most importantly, your mortgage broker works for you and not the bank. A mortgage broker has a fiduciary responsibility to find you the best mortgage available. That is not the case with bank loan officers; their allegiance is to their employer. For example, if you walk into Bank A and their mortgage rate is 5% they will not tell you that Bank B could offer you the same mortgage at 4.75%. It is in their best interest not to tell you because they work for Bank A. On the other hand, the job of the mortgage broker is to shop Bank A, B, and all the other banks that provide mortgages to find you the best rate. When you apply for a home loan with a mortgage broker you are effectively applying for a loan with all the lenders the mortgage broker works with. If you only applied to one bank, you may get lucky and get the same rate the broker would have found, but you would certainly never have been able to consider the same range of options.
Transparency is a Guiding Principle:
Mortgage brokers typically make one point on loan transactions. A point is equal to 1% of the loan amount. It is your choice who pays the point. The benefit to you for paying the point is a lower interest rate. Typically, paying a point can lower the interest rate by .25%. On the other hand, you may choose to not pay the point upfront resulting in a slightly higher interest rate. In this case, the brokers point is being paid to them by the bank. The choice to pay or not pay points is dictated by your timeline for owning the property and alternative investment options.
A common misconception is that banks do not charge points. Banks are compensated the same way mortgage brokers are – they make 1% or more on your loan too! They call it profit are not required to disclose it to you like I do. If you want to know what you are paying for and why – choose Debra and Matt for your mortgage.