Seattle Mortgage Expert, Michael Sanborn, Says Look 'Both Ways' Before Crossing the Mortgage Highway

Share Article

New home purchase mortgage borrowers have two ways to obtain a mortgage – going directly to a retail bank for a loan or working with a mortgage broker for a wholesale loan. Either option may bring about the higher or lower cost with interest rates and fees, depending on approach.

Mortgage broker and expert, Michael Sanborn, says there are seven absolutes every borrower should consider before making a final decision on a lender.

1.    Choose a Lender Wisely -- “Statistically, borrowers who opt to go directly to a bank for a mortgage, do so because they have a banking relationship; possibly even just a checking account with that institution,” says Sanborn. “This may not be the best reason to use a bank as the source for a new home loan.”

2.    Understand a Broker’s Role -- “Borrowers who work with a mortgage broker will get wholesale direct interest rates,” Sanborn says. “But even mortgage brokers may not always produce a savings due to the high compensation many of them are looking for. Borrowers must be savvy on this point knowing precisely what the mortgage broker compensation is.”

3.    Know What You Are Buying -- “Most borrowers do not consider that they are actually making two purchases when buying a home,” Sanborn says. “They are buying the home and the home loan.”

4.    Make It Tangible -- Sanborn notes that, “borrowing money is the same as buying a product, like a car. In this case borrowers pay to have a lump sum of money. There is generally one source or “manufacturer” of that money when it comes to mortgages.    There are simply opportunities to pay more or less for the loan product.”

5.    Understand the Source -- Sanborn says that virtually all 30 year fixed rate mortgage loans are originated to be sold immediately to Fannie Mae or Freddie Mac. So while borrowers should not consider banks as the “manufacturer” of loans, as they would consider Ford or Chrysler the manufacturer of cars, a mortgage loan is somewhat like buying a Ford or Chrysler product from a dealer. “You want to pay as little as necessary to get that new car, but you can’t buy directly from the manufacturer, i.e., Fannie Mae, either,” says Sanborn. “Banks will sell direct to consumers, but they also offer wholesale pricing to mortgage brokers. In other words, most major bank lenders offer improved pricing through wholesale lending versus retail lending and that is where an honest mortgage broker can provide savings for borrowers.”

6.    Get What You Pay For -- “Mortgage brokers should have the borrower’s best interests in mind when finding the right lender and lowest wholesale rate and they should be paid for this service,” says Sanborn. “This is generally the better option because loan officers at a given bank are not going to send borrowers down the street for a better deal.”

7.    Get It On Paper -- When opting for a local mortgage broker, Sanborn says it is vital that borrowers “validate a fully licensed broker which can provide references.”

Sanborn is the owner of Saint Lawrence Mortgage, a mortgage broker firm which operates on a flat fee basis, rather than a percentage basis. Operating in Washington and Idaho, Saint Lawrence Mortgage is also a registered member of the Upfront Mortgage Brokers Association, UMBA.

“Our flat fee compensation model means that borrowers do not pay more for borrowing more,” said Sanborn. “For example, we recently completed a $200K loan for a client who had first attempted to get a loan on his own with the exact same rate and lender. By working with Saint Lawrence Mortgage, the cost of his loan was lowered by $1900.”    

About Saint Lawrence Mortgage:

Saint Lawrence Mortgage is a member of the Upfront Mortgage Brokers Association and is committed to honest, upfront and objective consultation to all clients. In 2004 Saint Lawrence Mortgage, LLC pioneered the flat fee/wholesale rate program so borrowers do not pay more to borrow more.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Bob Hawk
Visit website