Tulsa Mortgage : Podcast 147
Tulsa Mortgage This is Steve Currington dot com and the Steven Tyler show episode number 147. Well Steve Steve Kerr and Tyler smart are talking about them. No one knows what it’s like. 16 we are in the drive time studios and Jinx America talking today. Thank you for tuning in. If you’re on total lending you if you’re on iTunes listen into the Steven Tyler show. And today we’re talking about why closing costs are higher.
Why are closing costs higher with some others we just recently dealt with this because we picked up a loan from another wonder where the other lender was quote in closing costs that were about $2000 higher than our own and that the client was concerned because they were asking the seller to pay their closing costs but the seller would only pay a certain amount on the amount that the lender told them they needed was about 2000 more than the seller was willing to pay which meant what tiler. Now they’re going to bring more money to the table. Right. Which they didn’t have which they didn’t have. They only had their three and a half percent down they wanted to only bring that. So. So why Todd why why why were they higher. Well we haven’t seen the quote. I mean we didn’t get it many times. We haven’t seen it but we don’t really need to see the quote to know that. So that’s point one. OK. Why are they higher. And then the next point is going to be what do you do to get the deal. So if you’re a loan officer watching or listening and you know like well how do I sell that to the customer so that they’ll understand that I’m better. Right.
So Tyler why would they hire they’re greedy.
Tulsa Mortgage Well those lenders they’re just trying to take their money. I already know.
I mean fees vary from company to company. They just do you know.
So people have an underwriting and processing fee it’s different than others. Maybe it’s higher maybe it’s lower. Yes that was the case here. We had about a $500 less lender fees.
So now you’re at fifteen hundred bucks are there was 150000 or low cost for rates. Cost for rates.
Everybody’s got different margins set up. So you know I can see the difference between just I mean heck can be up to thousands of years difference.
So the guy that we were competing with that’s in our market on this deal a great guy been in the business for a long time does a good job. People like him. So.
Tulsa Mortgage If you’re a salesperson what do you do. Because you got a guy. We know what he’s doing. He’s probably calling them a lower rate with higher cost trying to win the game it’s over rates really low. And he’s a good guy and he isn’t probably gouging him it’s probably just the client not understanding how the costs work.
So how do you get that deal so how do we get that deal.
Tyler Here’s how I get the deal because I think we got the deal is we just quote it. As we would quote it knowing that the client is sensitive to keeping our closing costs under a certain number. And so we quoter the best rate we can get her with the closing cost. Where she needs them right now.
Tulsa Mortgage And we we won because sometimes you know I see what he was doing because he was trying to take her through the education of hey I can get you a lower rate if you pay more cost. Right. But she didn’t have more cost to pay. And so the lesson is you may not want to try to take a client down that path of educating them on you can get a lower rate with higher cost if they don’t have more money to be able to do it. So it really is a matter so if you just told them hey you need 60 500 closing costs that’s what you need. That’s what the sellers are going to pay. Or if the seller is only going to pay 60 500 then I can get there next. And that’s what we did. We we worked up a quote for her based on the lowest rate we could get her with the set with closing costs paid by the seller so that her closing costs didn’t exceed 65 on her because that’s what the seller is paying. So now she can rest assured that she’s only going to bring her down payment of three and a half percent now. That’s what she wanted. Right. And that’s how we won the client because we gave the client what she wanted. Well you know what I mean. So there are times when people are inquisitive about like well who was this other guy offer me a lower rate and you’re not. And they want to understand that.
Tulsa Mortgage And then you can tell them well they’re charging you $2000 more to get a lower rate. I can do that too. I can increase my closing cost to you to get you a lower rate. And by the way as a lender I don’t make any more money if I do that. It’s just like oh you want hey you want a quarter lower rate pay another fifteen hundred bucks. You want a half lower rate. Pay a lot more. You know it’s just your preference. But if you don’t take you know what I mean if if the loan officer just quote some really high closing costs because they’re trying to show them that they can lower the rate by point three some five and then the client in this case doesn’t understand and all they see is a big fat number nine thousand dollars in closing costs which they don’t have. Then what are they going to do. They’re gonna call me. That’s what happens they’re going to call another lender.
Tulsa MortgageSo I the exact same thing happened yesterday. Somebody said another quote because they were happy with their bank they’re getting charged too much money. I think someone in total six questions for it before I had it figured out that the bank was offering a conventional 5 percent now. They didn’t have the money and they’re paying their uncles costs unnecessarily necessarily have 5 percent plus all their closing costs and their credit score is like a 6 60 something like that. But they did have is three and a half percent and a much better rate with the 660 on an FHA versus a 5 percent and a lower down payment lower down payment lower monthly payment. So they were just trying to stick them into a product without figuring out what they want and which I don’t even have to know what the bank is and I don’t care.
But the reason why is because they don’t offer FHA I guarantee you the whole reason that bank was putting him into a 5 percent conventional is because they don’t have the FHA they don’t have government lot of credit things are like that nothing wrong with them.
They just don’t have the product and therefore they’re not going to sell you the product. If you come to me and ask for a product that I don’t offer. I’m not going to. Get you on that product because I can’t do that loan. So they pitch him on what they have.
Tulsa Mortgage Even though it isn’t the best thing for the customer. Right. So that’s what happens and so therefore their credit scores are lower. They’ve got higher closing costs. They’ve got a higher rate. They’ve got to hire everything and no one took the time and maybe they did and they just couldn’t offer him what they needed. You know no one took the time to figure out what was important to the customer. This particular one that I’m talking about. It was important to her. To not have to bring more than 3.5 percent down to the table period. That’s what she wanted. RAITT wasn’t important to her payment wasn’t important to her. None of that was important. She was I want to I’m selling this house this was the deal. We bought a house new construction. She didn’t like the builder. She thinks they did a bad job. She wants to dump that house she’s part of a year ago she wants to sell that house she wants to get out of it. Be even be done. Get a new house put 3 percent down and have a good day. That’s what she wants. Tell us what we gave her. And that’s what you want.
So she quizzed me I think I talked to her for I don’t know probably a good 45 minutes on two or three different occasions just quizzing about without seeing the other lenders quote about well what are your fees and you know her trying to figure out what all the costs are because sometimes you get people were day they’re so confused and they don’t understand the process they don’t trust anybody. And that’s where she was at. She just didn’t trust anyone because she you know she felt like the wall had been pulled over. She’s an intelligent person but she doesn’t know mortgage stuff and she’s sitting here thinking how is this guy 86 87 $100 in closing costs and this guy six Like what’s the game here.
Tulsa Mortgage Like who’s tricking me. Who’s pulling the wool or are you not doing that. And so it took a long. Like a lot of conversations with her to get through that for her to understand. The guy that she was dealing with was like I say it’s not a bad guy is when does wrong I’m just like I am he just didn’t go understand his client and know what they were looking for.
And so we just took care of that.
So closing costs are higher with some lenders because that’s how they set their cost some lenders have a higher underwriting and processing fee. Some lenders have higher margins they make more money every time they close alone. So their rates are higher.
Some of them have really high commission that they pay to their loan officers. So therefore for the company to make any money.
Tulsa Mortgage Their rates have to be really high. And so guess what if you get that loan officer they’re not doing anything illegal. But they’re just going to give you a higher rate than we can. They’re just going to because they have to pay the loan. They’re on a they’re on a contract. What they have to pay them and their rates are set based on their compensation. So be aware. And be careful because you might get a lender who’s going to charge you a whole lot more money for the same loan that you can get qualified for DLC for less.
Broadcasting live from the koala’s studios in Tulsa Oklahoma. You’re listening to the Steven Tyler show