Quote:
Originally Posted by jay santos
I don't know exactly how that works, but I'm thinking you would pay more that way than going to a mortgage broker and have them do it for you for half point. For example, if you called Zion's bank, they would certainly make more than a point on your loan. I don't know how bankrate.com or Lending Tree work, but I'm guessing they collect a nice yield spread and publish charts with a half or full point already taken out for their profit.
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Lending Tree doesn't "publish" anything. You request quotes on their site and lenders reply direct to you with their rate bids.
Why lenders don't necessarily get their "pound of flesh" at closing: from a WSJ article...
"Lending institutions are fighting to win business from consumers with good credit, many of which may be hesitant to buy, refinance or move up in the current housing market.
"It's a very competitive marketplace," says Terry Francisco, a spokesman for Bank of America Corp. in Charlotte, N.C. "We watch our competition closely."
One of the reasons banks want to make conventional loans is that consumers often end up with several products from the lender, including savings accounts, credit cards and checking accounts.
"We find that someone who has a mortgage with us will have about five products in addition to the mortgage," says Mr. Francisco.
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The current demand for home buyers with good credit makes it even more important for potential borrowers to shop around for the best deals. Individuals should check with their local credit union and bank, especially if they have existing accounts with those institutions.
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