The Question Most Lenders Hope You Never Ask

When a lender quotes you an interest rate do you know how that rate was determined? Do they explain it? Do they tell you how many discount points you are paying to get to that number? Most borrowers accept a rate quote without understanding what is built into it and that lack of transparency is costing them real money.

What Is Actually Inside Your Rate

Mortgage rates are not a fixed universal number that every lender quotes identically. They are influenced by market conditions, your credit profile, your loan type, property type, and a dozen other factors. But beyond those variables every lender also builds their own margin into the rate to cover their cost of doing business.

At large national lenders that margin covers a significant organizational structure. A multi-layer management hierarchy between you and the person actually working on your loan. Corporate marketing budgets that can run into millions of dollars per month. Shareholder return obligations for publicly traded companies. The full overhead of a national organization that needs to generate profit from every transaction to sustain itself.

Loan officers at large institutions are employees hitting quotas. Their incentive is not to find you the best possible deal. Their incentive is to close your loan efficiently within the parameters their employer has set.

How Canopy Mortgage Works Differently

As Judy Miller explains at Canopy Mortgage loan officers run their own branch with full autonomy and full accountability directly to the borrower. There is no six-layer management structure sitting between the borrower and the loan officer. There is no corporate marketing budget being funded by the margin in your rate. The model is lean and flat and the savings from that structure flow directly into the pricing that borrowers receive.

Judy Miller cannot promise the lowest rate in the universe. No honest lender should make that claim because rates change daily based on market conditions and no single lender wins on every scenario for every borrower. But what she can tell you is that when you work with her team you are not subsidizing a CEO's salary or a national advertising campaign with the margin built into your rate.

Borrowers who compare Canopy Mortgage to big national lenders and local banks consistently find that the numbers are competitive and hard to beat particularly on conventional and government loan products where the pricing difference shows up most clearly.

What You Should Know Before You Accept Any Rate Quote

Ask how the rate was determined. Ask how many discount points are included. Ask what the lender's margin is and what overhead structure that margin is covering. Those are questions any honest lender should be able to answer directly.

Your interest rate should not be determined by the amount of the CEO's salary. It should reflect the actual cost of the money, your risk profile as a borrower, and a reasonable margin for a lender who is working efficiently on your behalf.

Give Judy Miller a call and she will walk you through exactly how your interest rate is determined and what you are actually paying for when you compare options. Judy Miller is Branch Owner at Canopy Mortgage and would love to show you the difference a lean and accountable lending structure makes in your numbers.

Sources

ConsumerFinancialProtectionBureau.gov
MortgageNewsDaily.com
NationalMortgageProfessional.com
Investopedia.com
Forbes.com