If you’ve been working with a good and honest mortgage broker, you’re already getting the lowest rates possible. A good mortgage broker knows that providing folks with lowest rates and best terms is the right way to do business, regardless of the amount of his paycheck.
A good broker knows that they are only as good as their reputations, and unless they’re honest and upfront with every client, they won’t get repeat business. (Which is THE way to do business – ANY kind of business, whether you’re in real estate or you’re a dentist,
But not every mortgage broker works that way, especially when you consider that if a loan has higher interest rates and higher points – the mortgage broker makes more money! Yikes!
The new rule will change things though – the way brokers will soon get paid will be a fixed commission that is no longer tied to loan terms. Yay!
The new rule comes from the Federal Reserve and is called “Loan Originator Compensation amendment to Regulation Z” and the rule kicks in April 1st of this year (2011).
So if you’ve been dealing with a broker that’s been putting their paycheck in front of your needs, your loans, be it for a purchase or a refinance, will get cheaper.
Though if you haven’t been dealing with some honest, (shameless plug for my favorite mortgage broker alert!) like Tim Higbee from Guarantee Mortgage, then, well, you probably won’t notice much of a difference. Honest brokers like Tim have been putting their clients’ needs first for years. 🙂