Who should do your next mortgage?

It surprised me how many people I talked to this week that don't have a 'mortgage guy'. What do I mean by 'mortgage guy' (or gal, if she's from Texas)? That's the person that did your last loan, set some targets for you to consider refinancing, and then called you when those targets were met.

I've heard stories that 60% of the loan officers in the country have not renewed their licenses for next year. If your mortgage guy was one of them, maybe that's a good thing for you.

So, who should you work with next time? Well, there are 4 basic sources for you.
1. Go to your local bank. You should find a nice, well-dressed, loan officer, who also wants to open a checking account for you to meet his/her bank's goals. They have one set of rates/products, so if they happen to have the best rates on the day you walk in, and the market is also at a low point, you have it made. Trouble is, you'll never know if they have good rates or not, as they can't shop for you.

2. Check out an Internet loan shopping site. Yikes! It's usually more enjoyable easier to visit the dog pound wearing ground beef underwear. When you fill out a form on a loan searching website, your email and phone number will be sold to several companies who hire aggressive tele-marketers to sell you their service. The rates may be lower, but the path to that low rate can be really tough.

3. Work with a Mortgage Broker. Independent, a variety of lenders, and usually more experienced than a local bank loan officer. They get paid by matching up borrowers with lenders. Mortgage brokers will be paid either an Origination Fee by the borrower, or 'Yield Spread Premium' (YSP) from the lender. The lender will pay YSP when the broker brings the lender a loan with a higher rate that the 'Par' offering. With a Broker, you have the choice to pay an Origination Fee in exchange for the lowest Par rates, or, accept a slightly higher rate and the lender will compensate the Broker with the YSP. Be sure to ask the Broker about his total compensation, and the breakdown between YSP and Origination Fees. Mortgage Brokers don't lend their own funds, so they don't control the underwriting or funding of the loans. This can sometimes be nerve-racking, especially when the lenders get busy, as the broker just hopes for the best.

4. Work with a Mortgage Banker. Like Brokers, Mortgage Bankers are usually more experienced and work with a variety of lenders so that they can shop interest rates for you. The key difference is that Mortgage Bankers control the whole transaction from start to finish, and after closing will transfer your loan to the lender that they originally locked in the interest rate with.


I've worked for Banks, Mortgage Brokers and Mortgage Bankers. I found the Mortgage Banker business plan gives me the best opportunity to get great rates and superior service for my clients. I get the flexibility of multiple lenders to shop for rates but keep control of the process so I can meet my clients expectations and time frames.

When you are looking for your next mortgage, find out what business model a prospective loan officer works in, and decide in advance what is most important to you: variety of rates, service level, ease of transaction, and control of the process. For more information, visit my website at www.piedmont-mortgage.com.