Mortgage Referrals
Definition of "Mortgage Referrals"
Advice on where to go to get a mortgage. A borrower can always select a loan provider by throwing a dart at the Yellow Pages. A referral is of value if it raises the probability of a good outcome above that from throwing the dart. The four major sources of referrals are real estate sales agents, other borrowers, Internet referral sites, and builders. Real Estate Sales Agents: Home purchasers accept more referrals from real estate sales agents than from all other sources combined. Sales agent referrals generally are to individual loan officers or brokers, as opposed to firms. An agent with great confidence in a loan officer will continue to refer clients even when the loan officer switches firms. Sales agents have the same interest as buyers in completing transactions. Hence, they refer clients to loan providers who can generally be depended upon to close on time. This is the agent's major concern, and it is a concern of borrowers as well. Sales agents have no comparable interest in the mortgage price or whether the borrower is placed in the right kind of mortgage. However, the agent doesn't want the price to be so far out of line or the service provided so abysmal that the borrower throws a fit and blames the agent. Other Borrowers: Referrals from other borrowers are usually based on a single transaction. Internet Referral Sites: These Web sites provide price information for a large number of lenders and mortgage brokers, usually listed by state. They also provide quick entree to the Web sites of each loan provider listed. Builder Referrals: Builder referrals are usually to a lender with whom the builder has a financial arrangement. Hence, they are suspect. In some cases, preferred lenders price loans above the market and kick back some of the excess to the builder. Self-Referrals: Responding to self-referrals (solicitations) usually is a bad idea. Not all lenders who solicit are predators, but all predators solicit.
Popular Mortgage Terms
The most recently published value of the index used to adjust the interest rate on an indexed ARM. ...
Allowing the interest rate and points to vary with changes in market conditions, as opposed to 'locking' them. Floating may be mandatory until the lender's lock requirements have been met. ...
Also called variable or flexible rate mortgage, an adjustable rate mortgage (ARM) is a mortgage where the interest rate is not constant, but changes over time by the mortgage lender. ...
A mortgage Web site designed to provide leads to lenders. A 'lead' is a packet of information about a consumer in the market for a loan. Lenders pay for leads, and these sites are an ...
An upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., '3 points' means a charge equal to 3% of the loan ...
Refinancing that omits some of the standard risk control measures and is therefore quicker and less costly. The rationale for streamlined refinancing is that, while it is an entirely new ...
A sale price below market value, where the difference is a gift from the sellers to the buyers. Such gifts are usually between family members. Lenders will usually allow the gift to count ...
A bundle of mortgage characteristics that lenders view as comprising a distinct category. The characteristics used include whether it is an FRM, ARM, or Balloon, the term, the initial ...
Same as term Interest Rate: The rate charged the borrower each period for the loan of money, by custom quoted on an annual basis. A mortgage interest rate is a rate on a loan secured by a ...
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