HousingWire sat down with AIME Chairman Anthony Casa to discuss how brokers provide homebuyers with year-round low rates.
Q. We know that mortgage brokers save borrowers money by offering lower rates. But you’ve said that the real advantage is the increased buying power they deliver. Can you elaborate on that?
A. Of course! You’re correct that mortgage brokers have access to lower wholesale rates — usually between 0.5% and 1% lower than retail — but that’s only part of the story. You see, a lot of borrowers aren’t just looking for lower payments. They already know how much they can afford to pay each month. What they really want is to get as much house as they can within their budget — and a mortgage broker can make their money go farther. Let’s say a homebuyer’s budget for their monthly mortgage payment is $1,564. If they went retail with a 4.75% interest rate, they’d be looking at about a $325,000 loan amount. But with a 3.75% interest rate through a mortgage broker, they could look at homes up to about $338,000. And that could make the difference between getting their dream home or settling for something less.
April 29, 2019 Alyssa Stringer