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Upfront Mortgage Brokers FAQ And The Reason Of Don't Ask An UMB To Quote A Rate

Questions About Upfront Mortgage Brokers

Why do I need a web site?

A web site is the means by which you declare who you are and what you do. By placing the UMB commitment on your site, you are announcing to the public that you are prepared to do business in accordance with UMB principles.

Your web site is also the channel through which you will get referrals from my site, which will list UMBs by URL, not telephone number. Consumers referred to you from my site will probably have read the pages describing what an UMB is and why a consumer will benefit from doing business with you. They will be informed loan prospects.

A web site also provides you with an opportunity to communicate other important information about yourself, and perhaps prepare the customer to do business with you. For example, you may want to indicate just what you expect of the customer, as the counterpart to your commitment to him. You might even want to specify what the customer should bring to the initial meeting.

How do I deal with consumers who aren¡¯t ready to deal with an upfront mortgage broker?

You are obliged to follow the Upfront Mortgage Brokers commitments at a customer¡¯s request. Customers who find you through my web site will expect you to act as an Upfront Mortgage Brokers. Customers who come to you from other sources may not. If the customer is unaware of the Upfront Mortgage Brokers option, it is up to you to decide whether to explain and offer it, or to operate in the more customary way.

Don't ask an Upfront Mortgage Broker™ (UMB) to quote a rate to you because you will be wasting your time and theirs.

If they do quote a rate, it is unlikely to be the best one you hear, because it will be an honest quote. Honest brokers can't compete with "sunshine blowers" who ensnare consumers by quoting prices they cannot actually deliver. The sunshine blowers have a dozen tricks they can use to raise the price once they have you on the hook.

When you deal with a Upfront Mortgage Brokers, you aren't shopping for a loan. Rather, you are retaining the broker to shop for you. The broker will represent you in shopping lenders. Brokers can shop lenders far better than you, among other reasons, because they are in continuing contact with many lenders.

For their services, Upfront Mortgage Brokers charge a fee that is negotiated at the beginning. Once set, it won't be changed. You are protected against all the tricks of the mortgage broker trade.

When borrowers deal with conventional (non-UMB) brokers, they usually are not aware of the broker's fee at the beginning because the fee is included in the quoted price. The fee is implicit, not explicit, and the broker is not bound by it. Hence, from the day of the initial price quote to the day the loan closes, you must be on your guard.

The UMB's fee will typically be a significant 4-figure number. You shouldn't let that faze you. For one thing, the Upfront Mortgage Brokers is going to pass through directly to you the wholesale rates received from lenders. These rates typically are about 3/8% below the retail rates quoted by lenders. This is the equivalent of an upfront charge of about 1.5 points, or 1.5% of the loan amount. In many if not most cases, this saving will completely cover the Upfront Mortgage Brokers's fee. Furthermore, the Upfront Mortgage Brokers can save you a lot of money in other ways.

Bear in mind that a one-point fee is $5,000 on a $500,000 loan but only $500 on a $50,000 loan. Hence, if the UMB's fee is expressed in points, expect it to be higher on smaller loans. You should also expect to pay more if the Upfront Mortgage Brokers anticipates that you will be a "tough case" -- for example, you have credit problems that must be cleared up or you can't document your finances.