Quote:
Originally Posted by BlueHair
I think cheap loans can be found. If you paid 1/2 point total, you got a screaming deal. Mortgage companies could not operate on that margin if they gave that deal to everyone. Most companies need at least 2 points to stay in business. My point is most mortgage companies will offer 1/2 point origination to get you in the door, then charge more for something else to make up the difference.
To me not hiring a realtor is like changing your own oil or fixing your own car. It can be done, but why bother? Sure, you have to pay a mechanic $50 an hour (which seems steep), but it would take me 10 hours to do what he can do in one. Like I said, if you know what you are doing, go for it. I think the average person would be better off hiring a professional.
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Of course mortgage companies will offer you 1/2 point origination to get you in the door and charge you something else. That something else is called yield spread. If someone goes into the deal fulling understand my original post, they won't get taken for that extra 2 points. If you feel guilty making your loan officer do your loan for 1/2 point, then give him one point or even two points. The principle is to agree in advance and not let him take you unfairly. Loan officers can't make a living on 1/2 point because their volume is too low. It only takes 8 hours of work to close a loan. As a consumer, I'm not excited about paying someone six grand for one hard day's work.
As for paying a realtor: I wouldn't try to sell a home on my own. The MLS sells your home quickly and for more than you'll make selling your home on your own on average. There are major anti-consumer dynamics in that industry, but for now there's not much the consumer can do to fight it.