AJ with fiance, Kelly , and pups Mylo, Lani, and Velzy
By AJ Doerr, Loan Officer for Hawaii Mortgage Experts
About Hawaii Mortgage Experts
Hawaii Mortgage Experts has been in business on Oahu since 2013 with offices in Hawaii Kai, Ewa Beach, and Kapolei. We are a wholesale mortgage brokerage that is partnered with about 20 different lenders and specialize in every type of loan product including VA, Conventional, FHA, Jumbo, USDA, etc. The great thing about being partnered with 20 different lenders is I have the ability to shop the lowest interest rates and best mortgage products for our clients based on their specific financial needs. We also only require one hard credit pull to shop with our 20 lenders as opposed to shopping with four different lenders requiring four separate hard credit pulls negatively affecting your credit score. As a wholesale brokerage, we are provided some of the best interest rates on island because of the amount of business we generate for our lenders.
Why Choose a Mortgage Brokerage Instead of a Direct Lender?
This is a question I get frequently and enjoy answering. The main reason is to take full advantage of the interest rate and pricing discounts we receive for being a wholesale brokerage. I like to explain it to my clients as the difference in shopping at Costco/Sam’s Club vs. Foodland/Safeway. When a large entity like Costco produces sales at such a high volume, they have the ability to discount items for their customers. Our lenders are Costco in this example as they provide us the discounts, we then make available to our clients to take advantage of. As I mentioned above, we only require one hard credit report pull and can use that report to compare pricing with 20 different lenders. There are a few more advantages of going with a mortgage brokerage as opposed to directly with a lender but these are the main two that borrowers should know right off the bat.
Another major mortgage topic I find myself answering questions frequently with my clients is interest rate vs. monthly payment. It is very easy for a borrower (especially first-time homeowners) to only focus on interest rates. While low interest rates are extremely important, the bigger picture to look at and focus on is your monthly payment. While shopping various loan products for my clients, my eyes always shoot to monthly payments as lenders usually offer credits for borrowers taking slightly higher rates.
For example, this past week I was shopping rates and products for a first-time homebuyer and we both agreed the conventional loan was the best mortgage product for him and his family. The lender we selected that had the best rate that day was offering a rate of 5.125% with a cost to the borrower of $450 to be paid as an additional closing cost. In other words, this borrower was paying the lender an additional $450 for that 5.125% with a monthly mortgage payment of $2,700. After I opened the rate sheet for that same lender, it showed us that with a 5.25% rate, the lender would credit the borrower $3,000 and the monthly mortgage payment was $2,725. In other words, this borrower was receiving an additional $3,000 from the lender they could put to closing costs and their monthly payment would only go up $25 per month. It made more financial sense for this borrower to take the higher rate and wipe out most of their closing costs which they would have paid out of pocket.
The above scenario is just one example of how a mortgage broker will show you and explain the tricks and loopholes to save you the most money against big lending institutions that a direct lender simply wouldn’t. Please feel free to call or email me any time as I would be happy to provide more mortgage knowledge. After all, knowledge is power!
AJ is a New Jersey transplant, enjoys water sports that include surfing, SUPing, foiling, boating, fishing, spearfishing, and wing foiling. For further information on how HME can help you with your loan, please contact AJ at 808.226.9421 or send him an email at [email protected].