Time to go shopping?

There is an article in the October 13th edition of the Los Angeles Times in the real estate section. It tackles the subject of in-house mortgage brokers that work either for builders or real estate companies. According to the article, broker owned mortgage companies offer very competitive interest rates. Many builders offer "incentives" to buy homes, especially in this market, but in order to qualify for the the above mentioned incentives and discounts, you must use the brokers mortgage company. Hmmm. That's interesting, isn't it?

Real estate owned mortgage companies also state they are competitively priced and offer one stop shopping for the "benefit" of their clients. At one time, during a recent survey I found many in-house mortgage companies to be over 1% higher on a jumbo loan than what I was offering. So a higher interest rate is a "benefit?"

Real estate owned mortage companies have been around for several years now, so this is nothing new. The pressure that is being placed on Realtors to use these services, however, is unsurpassed. At some point you have to ask, who's interests (so to speak) are being served?

The article suggests you shop around. If you are considering using an in-house mortgage company, get at least two other quotes from other companies, and compare their fees as well as the rate.

Pretty sound advice. If you find yourself being pressured to use an in-house mortgage broker, remember you cannot be forced to. Your transaction is not dependent on using any in-house service. If you feel your Realtor is being too pushy then politely inform him or her that you plan to shop for a mortgage professional...the same way you plan to shop for a real estate professional.