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Credit Unions Can Sometimes Have the Best Fixed-Rate Mortgages Anywhere.

Many credit unions, while brokering most of their adjustable- and fixed-rate mortgage loans to other wholesale lenders, sometimes keep their shorter-term fixed-rate loans "in house" instead of brokering them.

Those 10-year and 15-year fixed-rate loans that are kept in house are approved by the credit union, and the funds are provided by the credit union. Longer-term fixed-rate loans are typically sent to a wholesale lender and brokered. Credit unions are not-for-profit institutions, and the revenue they produce can be used to subsidize a credit union member's interest rate. This is a little-known secret source of mortgage money at very competitive interest rates. Not every credit union will offer such a program, and even some that do may not do it all the time.

Mortgage Brokers May Be Able to Find, on Any Given Day, a Slightly Better Rate Quote.

Or so it seems. We'll discuss rates in more detail in Chapter 5, but the fact is that rates are mostly the same, give or take a bit, wherever you go.

The difference is that on any given day, some lenders will be better than other lenders. Not by a lot, maybe by 1/8 percent or so in rate. But it's still enough to make a difference. Your job is to make sure that your broker is giving you the best rate possible and that this rate beats anything you can get at other lenders.

How much is that 1/8 percent? On a $200,000 mortgage paid over 30 years at 6.00 percent, your monthly payment would be $1,199. At 61/8 percent, your monthly payment goes to $1,215. That's not a lot, mind you, but it's enough to notice. That's $16 you'll be saving each and every month, and if you're one of those people who plan on keeping the loan to its full term, then that's 30 years times 12 months times $16, or $5,760.

Even if it's not in the rate, 1/8 percent also yields a discount point reduction of 1/2 point. If you can get 6.00 percent at 1 discount point, then 6.125 percent should cost you only 1/2 point. On that same $200,000, that 1/2 point results in a $1,000 savings.

That's where a broker can help. Don't expect to get 6.00 percent while everyone else is getting 7.00 percent, but you can often find a slightly better rate.

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