CONSUMERS HAVE BETTER MORTGAGE OPTIONS THANKS TO THE CFPB

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We hear a lot these days about the CFPB (Consumer Financial Protection Bureau). Some of it good, some of it bad – and opinions often depend which side of the political aisle you’re on. But a funny thing happens when you change your viewpoint from “Republican vs. Democrat” to one of “Consumer vs. Financial Institutions.” All of a sudden, the intent of the CFPB comes into focus: Its policies and regulations are designed to benefit the consumer, and to level the playing field between financial entities.

Recalling the not-to-distant economic crisis that the country found itself in a few years back, a new phrase entered the U.S. consciousness: “Too big to fail.” The premise, of course, being that the country could not afford to let certain corporations fail as it would be disastrous to the greater economic system.

What this concept allowed to occur, however, was for large banks and financial institutions to be held unaccountable for taking risks that would have put smaller entities out of business. Certainly, there is a veritable library of books written on this topic that offers every theory and opinion under the sun in support or detraction of this policy.

But for consumers, the bottom line is this: Particularly when it comes to mortgage loans, the Dodd-Frank Act allowed the CFPB to make the business of mortgage lending fair and more competitive among mortgage lenders.

One way that consumers have benefitted from these policies are from the recent actions taken by the Consumer Financial Protection Bureau. This legislation ensures that consumers have access to easily understood – and easily compared – information that they receive from mortgage lenders, as well as many other safeguards.

It’s still not a perfect system. For example, mortgage brokers are limited on how much they can earn from every loan they make – while banks and mortgage bankers are not. But the CFPB’s efforts to restrict banks from monopolizing the mortgage industry (which results in higher rates and fees for consumers) are gaining ground.

What does this mean for home buyers? That they now have the tools needed to make an “apples-to-apples” review of mortgage loan offers. By comparing the fees and interest rates on the Loan Estimate, consumers can now easily distinguish the most cost-effective mortgage product for their needs.

The fact is, once you close your loan, you have an interest rate and a payment – and that’s it. So the only real consideration you need to make while shopping for a loan is finding the best interest rate, with the lowest fees. (Spoiler alert: Premier Mortgage Lending happens to be the home of the true “No Fee Loan” in Las Vegas.)

In today’s more competitive mortgage lending environment, buyers are more likely to get the best loan from a small, local mortgage broker. After all – it costs money to maintain a big office, a huge staff, and a string of executives (those would be your big banks, of course). Conversely – a small, well-run mortgage broker operates on much smaller gross income – and those are savings that get passed along to the borrower. That’s you.

Premier Mortgage Lending is the home of the true “No Fee” mortgage loan. Find out more at our www.KnowBeforeYouOweNevada.com website. Our series of short educational videos explain exactly what you need to know to save big money on your next mortgage loan – and know which questions you need to make sure you ask your next mortgage lender.

Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.

YOUR MORTGAGE LOAN IS YOUR RESPONSIBILITY. SHOULDN’T IT BE YOUR CHOICE, TOO?

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Signing on the dotted line. There’s a good reason that phrase is so embedded in our consciousness and causes us to hesitate and think – one last time – before we affix our name to a document. In most cases that signature is making a financial commitment, and whoever adds theirs is incurring a (generally enforceable) responsibility to meet a payment obligation.

So we’d like you to think back to the last time your Realtor signed your loan documents, with you. Oh that’s right – they don’t, do they?

The reason we ask is to remind you that when it comes to your new mortgage loan, you are the one who’s going to be making those mortgage payments – month in and month out, year after year. Not your real estate professional. Not your mortgage lender. Just little…ol’…you.

Knowing that, it stands to reason that you need to be vigilant about ensuring you’re getting the most value, saving the most money, and getting the right mortgage loan for your needs. If you’re one of those people who just “assumes” all mortgage lenders are the same . . . then think again. Different regulations apply to different types of lenders – and that means that all lenders are not created equal. (See our recent article entitled “The Difference Between Mortgage Brokers and Mortgage Bankers” for more information on this subject.)

To help you navigate the path to the right home loan, here are the things you should know:

1. First, a “pre-qual” letter is not a commitment to make a loan. It’s simply a lender’s opinion – based on your verbal representations – of whether or not you may be likely to obtain a mortgage. So remember, it’s fine to include them in your list of lenders to shop for the best rates and fees. But you need tangible proof to compare their figures to other lenders and make sure you’re getting the best value.

2. Once you have picked the home you want, you need to get that loan, right? But if your real estate professional refers you to only one mortgage lender, consider that a red flag. (this is usually what they refer to as their “preferred lender”) Why? Because they should be encouraging you to gather written “Lender Estimates” from at least two different companies so you can properly compare their loan fees and interest rates.

The good news? If you were advised to go to only one lender, this is where you can take back control of your financial future. Go ahead and visit the first lender. But then- independently – go visit one or two other lenders to get their Loan Estimates, too.

One reason this is critical is that there are true “No Fee” mortgage loans available – in fact, Premier Mortgage makes them every day. So if you see a list of fees on your Realtor’s “preferred lender” estimate, you should be aware that’s money that you don’t have to spend.

3. Once you have at least two Lender Estimates in hand, how do you know which figures to compare? This quick 2-1/2 minute video explains in further detail, but the key things to know are this:

• Compare the interest rates

• Compare the Loan Origination charges (Loan Origination Fee, Processing Fee, Underwriting Fees, and Document Preparation Fee)

By reviewing the Lender Estimates side-by-side, you can zero in on the differences that matter: What is it going to cost you? If all other terms are equal (for example – the same loan amount, 30-year mortgage, etc.)then your best financial choice is going to be the lender that costs you ZERO in loan costs for the lowest possible interest rate. Period.

Just remember who is going to be on-the-hook for those monthly payments, and you’ll be motivated to shop around for the best rates on your mortgage loan. We guarantee it.

Premier Mortgage Lending is the home of the true “No Fee” mortgage loan. Find out more at our www.KnowBeforeYouOweNevada.com website. Our series of short educational videos explain exactly what you need to know to save big money on your next mortgage loan – and know which questions you need to make sure you ask your next mortgage lender.

Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.