Financing in Austin>Question Details

Austin Buyer…, Home Buyer in Austin, TX

With new loan regulations do all mortgage brokers offer similar rates? If so then why do some bankers and brokers say they are more competitive ?

Asked by Austin BuyerNow, Austin, TX Sat Sep 28, 2013

I've had a couple of mortgage brokers tell me that with the new regulations that they all offer similar products/rates. But I've also had a broker and a bank lender say they have very competitive products especially when it comes to jumbos. Can someone clarify for me which it is? Does everyone have to offer similar rates? Are lenders and brokers held to different rules? Why choose a lender vs a broker? And why do some brokers say they can waive their fee?


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Brokers and lenders offer very different rates. It depends on the broker or lender's profit margin after business expenses. The more a broker or lender wants to make, the higher the rate. Some will use the extra profit at the higher rate to "waive" fees. They are not really waived, just paid for by your broker or lender with their final commission.

If the loan is an "agency" loan then basically they are held to the same rules or underwriting guidelines. Jumbo loans are technically non-conforming and therefore each investor can write their own rules and set their own pricing. To drum up business and investor will lower rates on select products offering very competitive pricing.

There is one big difference between brokers and lenders:

* Lenders often have underwriting and closing departments all in-house. This gives lenders a little more control and flexibility over these two processes. They also have a warehouse lines that they use to close the loan's in their own name.
* Brokers send files to investors to be underwritten and closed. There less control and it takes a little bit more time using brokers. However, brokers often have extremely competitive rates because they have very little overhead.
1 vote Thank Flag Link Mon Sep 30, 2013
This isn't correct. Brokers are required to disclose their origination fee, which include both the broker's compensation and the overhead and profit of the firm. If there is YSP over and above the origination fee, by regulation it MUST be credited toward the borrower's closing costs. The retail banks are exempted from this disclosure. They don't have to disclose how much they make on a loan, and if there is SRP in excess of their origination charges, they don't have to tell the borrower about it, and they don't have to credit any of it towards the borrowers closing costs. They can keep it all as extra profit. This is what you get when you let the Big Banks write the rules that apply to everybody but themselves. Crony capitalism at its worst.
Flag Tue May 6, 2014
Good question Austin:

There is no regulation saying that we have to be the same..... But there are some things going on.

Loan officer pay has been restricted.... We no longer have a way to earn more on hard deals by influencing the rate. Many of us make a flat fee based on loan amount and that is all.
With this, the govt has made it harder for people with 'hard deals' or low loan amounts to get a mortgage because loan officers will pick the more profitable deals unless they aren't busy that month.... This is hurting the very people the govt 'said' they wanted to protect by jacking with our pay.

Now, we all pretty much sell to the same servicing lenders out there.... So we all pretty much have access to the same rates. How much profit is built in depends on how much the loan officer's company needs to make per deal to make a profit. So the rates are marked up accordingly.

So while we don't all have the SAME rates/fees.... we are getting closer to that than we ever have been.

You still need to shop around.

Tom Burris
Mortgage Banker
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
NMLS# 335055
Search Dallas area MLS for FREE. No registration =>
1 vote Thank Flag Link Sun Sep 29, 2013
I believe with the current regulations lenders rates are similar, yet not identical, because of the spread or yield they are allowed to make. However, within that range, some can be on the higher end of the spectrum and some can be on the lower end of the spectrum. This would hold true for non-jumbo or conforming loans, and jumbo loans as well. Lenders do have certain fees and rates that are capped to my knowledge. With that being said, some are going to be more competitive than others, and can waive certain fees if they so choose. It's also important that the lender deliver excellent service and can close on time, as I've seen many lenders quote low rates/fees and promise the moon, but not deliver. Remember, the seller is under no obligation to extend the closing date at all. If the lender cannot close on time, which is quite common with many lenders, the seller can keep the buyers deposit(earnest money) or sue for "specific performance" and you will also lose any and all fees you have invested into the property thus far, like Inspection fees, appraisal fee, etc., etc.

If you would like to talk to me further or speak to one of my lenders directly, they may be able to better answer your questions and help you obtain a loan at a fair rate with reasonable fees. I happen to be one of the top agents in the greater Austin area, and most of my clients who I've referred to my preferred lenders typically shop other lenders as well and up using my lenders ~95% of the time. I do not take any kickbacks or bonuses from the lenders, but simply asked them to give my clients the best rates, fees, terms possible, and also to give them the best service possible so they remain my preferred lender. If for example they do not uphold to my high standards, I do not use them anymore and they have a lot at stake as I do quite a bit of business annually.

If you would like, feel free to give me a call and I will be happy to steer you in the right direction and get your questions answered definitively and also assist you with your purchase if you do not yet have a Realtor working for you. I am with the #1 Real Estate company in the greater Austin area, Keller Williams, and happen to be one of their top agents, consistently in the top 20(Currently ranked #8 in my office of 325 top agents).

Feel free to call me now or tomorrow, Sunday, as I work from 10 AM to 7 PM seven days a week for my clients. I believe you will be very happy with my lenders and my services! Joe

Joe Jarusinsky, Realtor/Master Instructor, Keller Williams Realty, Austin's #1 Real Estate Company, Call 512-261-4415
1 vote Thank Flag Link Sat Sep 28, 2013
Brokers and lenders are very different. Retail lenders and mortgage bankers charge much higher fees for the same interest rate. I am wholesale broker with set compensation levels with my lenders. I can always get you the very best financing options because of this. My wife works for Chase and I have done loans for just about all of the people she works with... and they can get employee pricing but still go with me.

Here is an example on a client I refinanced that was going to go Wells Fargo. this was a $280,000 streamline FHA refinance and the client was with Wells Fargo. Basically on this type of refinance the borrower was going to have to bring about $6,000 to closing because with a streamline you cannot roll in certain fees like on a typical conventional refinance. My friend who works at Wells Fargo referred them to me because they could not afford to bring $6,000 to closing. I was able to offer them the same exact interest rate but here is the huge difference between working with a bank or a broker like myself... With the same rate offering I was able to give them roughly a $6,000 credit so they came to the closing table with zero out of pocket.

This is why a broker can always get you the best deal Wells Fargo was going to keep that extra $6,000 as profit and I am able to give it to the client to offer them essentially a no-cost refinance.

That is how I help my clients achieve the best loan options and keep as much money as possible in their pockets. It also helps me stay in this business because I am 100% referral driven. Once I work with a client they usually tell others and from there I get more business. I would rather offer a client a great deal and have them brag about it because that in the end keeps business coming my way. Also, I work with all of the major lenders in the country... just at the wholesale level. That is why I can always get you the very best deal. I can shop from over 15 different lenders and get you the best wholesale deal out there.

Hope this helps.

Don Groff | REALTOR® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
o 512.669.5599 | m 512.633.4157 |
websites: |
0 votes Thank Flag Link Thu Oct 3, 2013
The differences included but are not limited to the following.

1. which banks the broker and banker are set up with. Different banks are signed up with different banks to sell mortgages to. Brokers are signed up with different banks to broker to. Some banks have better jumbo programs than others

2. The loan officers comp plan matters as well. The higher the comp plan the higher the rate, the lower the comp plan the lower the rate. These two go in combination as well.

Why don't you email me your specifics below and I will get you a quote to compare. You should get at least 3 quotes and compare fee sheets

Sales Price
Loan Amount
Property Type
Loan Type wanted I.E. 15, 30 year fixed or 3,5,7 or 10 year ARM
Credit scores
Waive Escrows or set up Escrows.
0 votes Thank Flag Link Mon Sep 30, 2013
" But I've also had a broker and a bank lender say they have very competitive products especially when it comes to jumbos."

If you are talking about jumbo loans, no one below has given you a correct answer. Since jumbo loans by definition are non-conforming, there is no guideline on rates, pricing adjustments, etc. There is no Fannie Mae or Freddie Mac or MBS or any tangible force that drives the movement of rates. Jumbo loans are portfolio meaning each lender will keep them on their books. Therefore, they can loan what they want, to whomever they want, at whatever terms they want. I have jumbo lenders with rates that span from "laugh out loud terrible" to "I cant believe they are seriously offering that" low. It all depends on the lender, the scenario and the borrower's credentials. Jumbo lenders will do things for their borrowers with deposited assets that they would not do for others.

Bottom line; there are no rules for jumbo loans.
0 votes Thank Flag Link Mon Sep 30, 2013
First of all I would like to say good luck on buying your new home. One thing I can advise you with is go to different lenders and ask as many question as you want, Then decide on the one that suit your needs. Think about when you decided to buy a house, I am sure you looked at different homes and different builders then you decided on the one that fits your needs. Right? Loan are the same. Different bank or different broker everybody have some kind of special way of getting their clients. For exsmble: Some realtor will charge you 6%to sell your home 3% for listing agent and 3% for buyer agent. Some realtor will charge you 1% or 2% for listing, everyone make there own price because, commission is negotiable. My point is at the end they all do the same thing, but which one would you go with? and why? you have to feel comfortable and satisfy of what you are going to sign on. Best of luck to you!
Let me know if I can help in any way.
0 votes Thank Flag Link Sun Sep 29, 2013
"My point is at the end they all do the same thing"
We do? Are we service providers controlled by agents to act the same way?
The real money is in agent commissions.... They can be negotiated WAY DOWN!!!!!!!!!
Flag Sun Sep 29, 2013
Lenders, just like Realtors, work throughout the local market but everyone tends to have an area or clientele they specialize it. Ask them point blank, what is your target client demographic. You will be amazed at the variety and YES, it pays to shop around if you are not the typical buyer (reasonable credit score, steady/easily verifiable job history, consistent/steady income, target property in a well known area). Some lenders are great at portfolio loans, others are good for high risk clients, and many have specialized deals for unique cases. If you need help finding the right one, contact me.
0 votes Thank Flag Link Sat Sep 28, 2013
If you are talking to big banks, it probably sounds like they offer nearly the same products and rates, but in the broader market of real Mortgage Bankers, the differences of product offerings and costs is dramatic and real. Sometimes you just have to know where you should be shopping loans and it's probably not the place where you deposited your pay check this week.

I am a Realtor--not a Mortgage Banker, but I point my clients toward great MB's every day.

Austin Real Estate Secrets .com
Tim Thornton, Realtor
0 votes Thank Flag Link Sat Sep 28, 2013
Rates and fees do vary by lender. Additional regulations have been added in recent years that even out lender charges so that each of the lender's customers get charged a uniform set of fees and margins, but brokers, bankers and other lenders are mostly free to set their own rates and closing costs.
Some brokers and bankers offer products from only one investor, while others have several banks and loan investors to choose from. That is why different programs and different rates are offered at each lending institution.
I agree with others who say service matters. It certainly isn't the same everywhere. Can the lender you choose process the loan in a timely manner? Do they meet the deadlines and closing dates imposed by your purchase contract? Do they accurately anticipate what is needed to get a speedy approval? Who makes the loan decision?
I wear two hats as both Realtor and mortgage banker. Through my company, we offer local in- house processing, loan decisions and funding. We have many different lender/investors too choose from. Contact me for a rate quote or more info.
Web Reference:
0 votes Thank Flag Link Sat Sep 28, 2013
While most lenders/brokers offer similar rates and terms to be competitive, there is no regulation stating what their terms must be. Therefore, I would recommend shopping around and having them compete.

I would be happy to refer you to some local lenders. Please feel free to contact me anytime without obligation.

Steve Nusinow
0 votes Thank Flag Link Sat Sep 28, 2013
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