The short answer is that it just depends upon how agressive the provider is in trying to make money. Part of what comes into play is the secret life of a home loan. A home loan is more than just a piece of paper where a lender promises money to a borrower in return for interest. It is a commodity - precisely the factor that led to the 'mortgage crisis'. Lenders bundle groups of loans with certain risk levels and sell them on the open market as a commodity, just like a stock or a bond.
Now look at the different players and their interest in this primary part of the business. If you are a bank, you may be keeping some of the loans as part of your own portfolio, but you may also be planning to sell some on the open market. Wells Fargo is an example of a large bank that carries a lot of its own 'paper' (loans). Of course, if you are the bank, you are only offering your own bank's programs. Banks may be able to offer slightly lower rates but may try to make up some income with higher transaction fees.
Contrast that with mortgage brokers who can shop for the best loan program any where: with any bank or government agency. Some mortgage brokers only place loans. Other mortgage brokers self-fund the majority of their loans, effectively acting as private lenders. Then they sell those loans on the secondary market. These lenders may offer slightly higher rates, but have lower transaction costs.
So, how do you know which loan is right for you? Well, this is where the Good Faith Estimate comes into play. Every lender should be able to provide you with a good faith estimate. That should level the playing field. Not only will it show you your actual payments, but also your true APR (annual percentage rate) with both the interest rate and the transaction fees added together.
The two lenders that I refer most often are:
Julie Atchison, Landover Mortgage
Aaron Johnston, Mortgage Trust
As a final note, a truely exceptional lender will look at you home loan and the rest of your financial goals and pick a program that really fits your needs. For example, when are you planning to retire, could your get a better return on your investment by having a lower mortgage payment and investing the difference elsewhere? Don't hesitate to 'get deep' with your mortgage professional to really test their knowledge. Likewise, get multiple bids and ask each mortgage pro to match the best points of others. You might be surprised at how flexible a lot of their fees really are.
If there is anything else that I can to do assist you, please don't hesitate to call. As you can tell, I like to get into the why behind things. It serves me well as a Realtor.
Kate Myers, Realtor, GRI
Coldwell Banker Barbara Sue Seal Properties