‘How Much Is This Mortgage Loan Going to Cost Me?’

“If you’re like most people, that’s usually the answer you want when you’re buying something: What is it really going to cost you? It seems the larger the expense, the harder it is to get a straight answer about what that final number is — and buying a home is one of the biggest purchases most people will make,” said Rick Piette, owner of Las Vegas-based Premier Mortgage Lending.

“But part of the reason that answer seems so elusive is because when you’re “buying,” someone else is, of course, “selling.” More often than not, that salesperson wants to tell you the reasons why their product is the best choice — because of the value, the benefits, the savings, the service and so on — before they give you the punchline about how much money you need to pay out of pocket when it’s all said and done.”

It’s a common sales technique. And in reality, it’s true that not all products are the same, especially when it comes to mortgage loans. Sometimes, there’s a good reason for a difference in cost between what seem to be similar products. But, on the other hand, sometimes the only difference between one mortgage loan and another might be the cost.

“Any mortgage loan is going to cost a borrower money. That’s just a fact, because lenders have to make a profit to operate, just as any business does,” Piette added. “But many consumers aren’t aware that there are different restrictions for different types of lenders. In general, consumers get home loans from banks, mortgage bankers and mortgage brokers. Not understanding the difference between them is where people get confused and can end up paying far more for their mortgage loan than they need to.”

For example, a mortgage broker, like Premier, is limited to earning its income from only one source on each loan and is required by law to disclose all its earnings to the borrower. In most cases, mortgage brokers receive their fee from the lending institution.

On the contrary, banks and mortgage bankers can earn money from multiple sources on the same loan and do not have to disclose their earnings to the borrower.

“But to get the best deal,” Piette continued, “borrowers need to know there are just two things they need to compare on their loan estimate: the fees and the interest rate. We always encourage people to shop their loan around with at least two different lenders, so they can compare those two numbers. That’s information that puts the borrower back in the driver’s seat, which is where they should be since they’re the ones who will be making the mortgage payments.

For more information about how to shop wisely for your next mortgage, visit KnowBeforeYouOweNevada.com. Premier Mortgage Lending, at 701 N. Green Valley Parkway, Suite 125, is a full-service lender and member of the Las Vegas, Henderson and Boulder City chambers of commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.