How Are Your Rates So Low

Many clients come to HOMES Mortgage Lending because of our low rates and we are often are asked how they are so competitive. There are two main reasons, we have very low overhead which we pass onto our clients and we are a mortgage brokerage which means we have multiple lenders we shop amongst for you. 

Before going into further detail it is important to understand how mortgage lenders and loan officers profit on your loan. In general the lender makes their money by selling your mortgage at a profit on the secondary market. For example if a mortgage company originates a loan for $400,000 they may be able to sell that mortgage on the secondary market for $407,500 netting them $7,000 (this is a hypothetical example). The loan officer will be paid a commission for their efforts, typically a percentage of the loan amount, and the lender will keep the rest to cover their expenses and to make a profit. There are some loans that may not get sold, such as construction loans and many Jumbo loans, but the vast majority of conventional, FHA, VA, and USDA loans are sold. 

As a mortgage broker we get to set our commission on each loan and that gets backed into the rate. In general mortgage brokers are able to offer lower rates because the wholesale lenders that we utilize know that we have many choices and thus need to be more competitive in order for us to send our loans. At HOMES Mortgage Lending we work hard to make sure we are partnered with some of the best prices wholesale lenders in the industry. At HOMES Mortgage Lending we don't have unnecessary employees, large advertising budgets, office spaces with large rents, or many of the other costs that increase overhead and cause lenders to need to charge higher rate. This allows us to set our commission with the lenders we partner much lower than most brokerages. This gives our clients a lower rate using the same lender than other brokerages with higher commission agreements at the same lenders. Frankly we could charge higher rates and make more money while still having competitive rates. But we feel really good about offering the best rate possible to our clients. 

Taking out a home loan is a significant part of most people's finances. At HOMES Mortgage Lending will never deter you from comparing several options as it's important that you are getting as low a rate as possible for you and your family. Many lenders will try to sell you on things like service, speed, and efficiency in an attempt to get you to use them. Our response is always that you should be able to have great service and still get a great low rate and low lender costs! 

It is important to note that mortgage rates are essentially a commodity and are driven far more by economic conditions and the market than individual lenders. Meaning that it is very rare to find large spreads between lenders. That said on a $400,000 loan a 1/4% in rate difference is approximately a difference of $66/month (at 7% the principal and interest would be $2,661.21 and at 6.75% the principal and interest would be $2,594.39). In our opinion it is certainly worth your time to try to work with a lender like HOMES Mortgage Lending who's rates are on the lower end of the spectrum. 

HOMES Mortgage Lending

Great Service, Great Rates, Supporting the Great Lakes