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A: Why use a Connecticut Mortgage Broker?
Connecticut Mortgage brokers.
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5. Finding Your Lender
position, we are an extension of their own marketing and administrative efforts, saving them costs while doing some of their job for them.
How are you paid?
How a Connecticut home loan representative is paid affects the CT mortgage rate you are quoted. When compensation is paid based on a percentage of your Connecticut home loan amount, it is very likely an overage is being added to your CT mortgage rate. (An overage is an amount, a commission, added onto a base CT mortgage rate specifically to improve compensation).
Example: You are purchasing a home with a Connecticut home loan amount of $100,000. The Connecticut home loan representative you are working with has a CT mortgage rate of 7% that they could offer you at with zero points. Instead the Connecticut home loan officer quotes you 7% with 1 point. One point is 1% of the Connecticut home loan amount or $1,000 in this example.
Acorn Home Mortgage, whether we select regular CT mortgage banks or institutional (portfolio) lenders, or a combination of both in looking for your best CT mortgage rate, these lenders pay us for the work we do. For the majority of CT mortgages that we arrange, there should be no fees that you have to pay to us. The reason for this is that we arrange CT mortgages in what is often referred to as the ‘wholesale’ market; we deal in volume as a CT mortgage broker and therefore get lower CT mortgage rates as a result and can often pass these savings on to you.
One reason you might pay points up front is because your total monthly debt is above 50% of the gross monthly income. Under these circumstances we might advise that you pay points to reduce the CT mortgage rate on the Connecticut home loan. A point is one per cent of the total CT mortgage amount requested, referred to as a point in CT mortgage banking so as not to be confused with CT mortgage rates. Paying one point on a 30 year fixed rate CT mortgage can reduce your annual CT mortgage rate by 0.125% per year for the life of the Connecticut home loan. On a 30 year CT mortgage, it would take about seven years before you would start to benefit from the points paid up front at the Connecticut home loan closing.
If you are thinking of paying points to reduce your CT mortgage rate over the life of the load, remember that the main reason lenders are prepared to offer long term fixed rate CT mortgages is because the average life of a CT mortgage is only about three years. You would be best advised to consult with a CT mortgage specialist before deciding on the Connecticut home loan product that you will use. There are many different Connecticut home loan products which have been developed for the many different types of borrowers and circumstances of their loans. By paying points, for example, you can reduce the monthly interest payments on a CT mortgage and bring your total monthly debt to income ratio back down to below the 50% threshold. We can advise you as to whether you are better to pay points or to try to repay some of your existing debt, it will depend on your particular circumstances.
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