What rate should I be getting today on a 15 year fixed loan of 150k?  I do work for a guy who brokers loans and he offered to do my loan for 'free'.  He has one of his employees figuring it up and over the past 2 weeks, she has consistently said the rate is at 4.75.  Now, ahem, I have access to rate sheets and i can see that their take on a 15 yr fixed @ 4.75 is 1.85%.  Are they just trying to fuck me or what? It looks to me if they truly wanted to do it for free that they could do it at 4.25 w/ a .15% cut.  Now I have nothing against people making money, but dont tell me you are doing me a favor if you are in fact treating me just like anyone else.  Any of you guys in the business?

-Nuke

Yes.

No point/no cost and "free" are free in the sense that you aren't getting charged directly up front.  You can trade up front charges for backend charges to pay for the service of using a broker.  We usually do a combination of both.  If you look at your closing cost (hud-1) statements all the fees (front and back end) are listed there.  

The bank is paying the broker for selling the loan at that rate.

So its not like he would lose any money to do it at the bank's loweste advertised rate, i.e. 4.25.  He just wouldnt make any money.  There are no other fees involved for them?

-Nuke

It depends.  

It's doubtful you'll get him to do it at the lowest rate without paying him upfront, unless he really really likes you.

The firm I'm with has their own fees (about $500).  These are in addition to any other points you would pay.  

I am upfront about my fees with my clients.  

well, he did  say he is 'waiving his fees' so hes not charging me a fee but i guess he's still expecting to make money off the loan.

-Nuke

Forgot to add...

With many lenders, you can take the rebate and use it to pay off hits...ie...bad credit, low loan amount, high CLTV's, etc.  This is to avoid ending up with an even higher note rate.  

How many points do you want to pay? None?

A conforming fixed 15 year with a 45 day lock is 4.375% today.

If you could get by with a 7 day lock, you can get 4.25%

yeah, no points.  in addition to the rate being higher than i think it should, there is also a $250 processing fee, $450 underwriting fee, and some 'compensation' of $1520.  

Those were no-point rates I put up.

That "compensation" is likely a rate buy-down fee, but you won't get the lower fee...

With that fee (about a point) you should be able to get a rate of 4.125% with a 30 day lock

152K.  why would they need to do a rate buy down to get to 4.75?

They don't. They're fucking you.

thats what i was afraid of.  thanks for the help!

-Nuke