30 May Mortgage Brokers Cost You More Money

Mortgage brokers tend to charge more to place a loan than you would have to pay if you went directly to the lender, according to a recent HUD Study. This is not a surprise to consumer advocates but it tends to contradict the story told by mortgage brokers and their lobbyists. There's a shocker! The study by the Department of Housing & Urban Development's former chief economist, Susan Woodward, looked at 7,560 FHA-insured traditional 30-year fixed-rate loans placed during May and June, 2001. The study compared the closing costs incurred by consumers who went directly to a lender and those who went through a mortgage broker. It found that the average fees for the loan through a broker were $4,000, while they were only $3,150 when the loan went directly through the lender.
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11 May What is the Difference Between My Interest Rate and the APR?

When shopping for a mortgage loan, most consumers are concerned with the interest rate of the loan. Within the past five years, interest rates on mortgages have hit historical lows and many home loans have been made. But there is more to a mortgage loan than the interest rate and a careful shopper will look at all of the options. Some of these option will affect the monthly payment, but many are 'got ya's that can change the affordability of a loan overnight. When advertising the availability of a loan, lenders are required by the Truth in Lender Act to disclose an Annual Percentage Rate (APR) which most consumers confuse with the interest rate on the loan. The confusion is legitimate, the A.P.R. is always disclosed as a percentage (%) and the lenders don't want you to know the difference. The real problem is that the projected A.P.R. may have nothing to do with the loan you actually get. A subsequent disclosure of the A.P.R. is required in final form only at the time the loan is made. This reflects the fact that interest rates and loan charges can change overnight drastically altering the terms of the deal. Most people can figure out what the interest is on a loan.
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