A recent article in the Washington Post reports that consumers shopping for mortgages may be offered "substantial credits" from mortgage brokers. The article explains that lenders may be able to offer similar help with closing costs, but that they don't always advertise that fact. This is because mortgage brokerages, unlike mortgage lenders, are required by law to pass certain monies back to their clients, according to the Post. 
As the article explains:
"[Mortgage brokers] are not permitted to earn any more than the disclosed amounts even if the funding source they choose for a buyer at a specific interest rate will pay them a premium for the loan. When brokers do not receive premiums, the extra money must be credited to the borrower. [...] Banks that lend their own money, by contrast, are under no such requirements on premiums. They have the option to offer an applicant a credit - or not - in connection for a given interest rate."
The article suggests that mortgage shoppers shouldn't focus solely on interest rate, and that they should ask about the possibility of credits toward closing costs.
Are you looking to start the home buying process? Email us at concierge@lizmoore.com, we'd love to help! Or, click below to download our free Home Buyer's Handbook.
Are you interested in hot real estate topics, tips and trends?
Click below to subscribe to our blog!
