I would like to take this opportunity to introduce you to my new monthly mortgage newsletter. I take pride in providing you with useful information that you will find helpful when making decisions regarding your mortgage. The monthly newsletter will be filled with different topics each month that will increase your knowledge of the mortgage industry and recent industry happenings. You will also find a home improvement tip in each issue that is designed to provide information on ways to increase your home's value. Please take a moment to review the monthly newsletter and click on the links on the left hand side for more news and resources. Feel free to contact me with any questions you may have and look for your mortgage newsletter every month.
Thank You,
Client Name
Spotlight
National Study of Mortgage Broker Pricing
Do you pay less for a home mortgage when you apply through a mortgage broker, or is it cheaper to apply direct to a lender? The answer may surprise you.
The first-ever independent national study of mortgage broker pricing versus direct retail lender pricing found that brokers tend to be cheaper. The new statistical study, conducted by a research team headed by Georgetown University economist Gregory Elliehausen, examined a massive sample of one-million plus subprime first and second mortgages from the portfolios of 10 major lenders. The researchers focused on annual percentage rates (APRs) -- the base interest rate plus lender or broker fees -- on loans originated by lender-employed loan officers and independent brokers who originate and sell their mortgages to the same lenders.
Broker-originated loans were 1.13 percentage points less costly than lender originated first mortgages, according to the statistical analysis. On second mortgages, the gap was even larger -- broker loans were 1.97 percentage points cheaper.
The study found similar patterns of differences between brokered mortgages and lender-originated loans in neighborhoods where 75 percent or more of the population is either African-American or Hispanic. Broker-originated first mortgages were one percentage point cheaper in African-American neighborhoods and second mortgages were 1.9 points less costly. In predominantly Hispanic neighborhoods broker-originated first mortgages were 2 points less costly and 2.4 points cheaper for seconds.
Georgetown's Elliehausen, senior scholar at the university's Credit Research Center, said the study results point to the potential economies that brokers bring to the marketplace by maintaining business relationships with large numbers of different lenders, especially in the subprime credit arena.
"Borrowers who lack experience in the mortgage market may reduce the cost of learning about the availability of different mortgage products, terms, and creditors through broker counseling," said Elliehausen.
