WHAT KIND OF MORTGAGE COMPANY IS DISCOUNT MORTGAGE SERVICES
Several years ago, when we would have closings for our Real Estate and Construction businesses, we would receive the HUD closing statements which listed the fees that were being charged to the buyers. The cost of the loans were running into thousands of dollars and we knew that the banks and mortgage companies were porking it up. So we decided to start a mortgage company that will not charge any fee that was not absolutely necessary to book and close the loan.
What we discovered is that it is very difficult to separate out legitimate fees from junk fees without understanding the entire loan process and the fundamental mathematics behind all loans. People like Ditech and Lending Tree advertise no closing costs, or costs of only $300.00, but then they raise the interest rate you pay for the next 30 years to cover the closing costs. The result is that your closing costs, in the form of a 1/8 % increase in your interest rate, will cost you thousands of dollars over the term of the loan.
When they raise your rate by 1/8 % the mortgage company gets a back end commission of an additional 1% of the loan amount. So then a 300,000 mortgage will pay an additional $3000.00 commission that Ditech uses for your closing costs. Additionally, please note, that all the online lenders are already 1-1 ¼ % higher than DISCOUNT MORTGAGES SERVICES already.
The same is true of the processing fee. All banks and mortgage companies charge a fee to perform all the clerical and legal paper work that is required to process a loan. The fee should be about $700.00 – $1000.00, depending on the circumstances of the loan. All banks and mortgage companies require a Title policy, which will insure you and your lender against claims against you Real Estate Title. The closing company is a business and must charge to prepare and close all the title documents, this is a necessary cost.
Some of the problems arise when any, or all of these fees, are inflated to extract more dollars from an unsuspecting client. Most Real Estate Agents are ill-equipped to advise their clients. Builders are notorious for inflating every item on the closing statement and recouping the costs of their Free Incentives. That is why they require you to book a loan with their mortgage provider, and use their title company if you want the “Free Incentives.”
I hope you are getting the big picture. What you need is a mortgage company you can trust, since you must look at the entire loan package to evaluate the costs; otherwise the excessive fees will be hidden somewhere or added into a legitimate fee. Please give us a call; we are concerned about You and Your needs. We will educate You so that You will have the advantage. We are the one stop shop for all your Real Estate needs in the Rocky Mountains. Whether a home of Your own, a retirement investment, an EVERGREEN COLORADO HOME LOAN or an EVERGREEN COLORADO MORTGAGE REFINANCE call us at 303-674-0148, Email us at markenglishrealestate@msn.com , or visit us on the web at www.evergreencoloradoliving.com . Don’t forget to register for Your FREE INCENTIVES on our web site.