How much $$ do banks make off of selling morgages??

[THRILLSEEKER]

What dictates how much $$ a private bank makes on selling morgages to Fannie Mae, Freddie Mac, or whoever??

Also does the private bank get paid differently for selling a fixed vs. adjustable rate note??


Aqua?? Anybody??

[FormulaOne]

I was actually just thinking the same thing yesterday. My mortgage was through my bank and after 2 weeks they sold it to another bank.

I cant imagine a bank would make more off buying an existing mortgage than being the originator.

If the interest rate is fixed what do they have to gain?

[THRILLSEEKER]

Not sure, but my bank is giving me the run around on refinancing and Im trying to get a handle on the big picture.

[Aqua-Holic]

Sorry guys....I have never been on the mortgage side :( One thing I do know is that MANY mortgage company's INSTANTLY farm them out.

For example when the misses and I were ready to close on our house we already knew who would be purchasing our mortgage.

[Racegirl]

Banks sell the mortgages to get the money back that they lent you so they can relend it to somebody else. Banks do not have an unlimited supply of money to lend out so the more loans they sell off to Freddie Mac or Fannie Mae the more $$s they have to lend again. Brokers make a couple of a percent from the lender in the form of yield spread or broker premium. Banks are about the same. Freddie Mac or Fannie Mae then sells the loans to other lenders who are willing to wait for the profit in the form of interest as you make your payments.

[X-driver]

Ok, that settles that..............now lets drink some beer!

[bajalion]

It's actually pretty complicated lets just say hunt for your best rate and that's it. The government makes it ptetty easy by giving a "rate" and the "apr". The APR is the true % which you borrowed once all the costs are added back.

If you wonder how they make money....look how much a 30year US treasury bond is paying (about 4.7% yield) 30 fixed Mortgage is about 6.0 to 6.5%. This spread is actually in a relative low for a bunch of reasons which is beyond the sope of this discussion:bike:

[THRILLSEEKER]

So would my private bank bennefit any more or less from a fixed rate morgage than an adjustable?? I know it was sold to one of the two F.M.s

[bajalion]

No not really. Stick with APR for comparision.

Mind you the APR is calulated over the life of the loan. If you get out early the APR (calculated) skyrockets. Since the average person only lives in their house between 5-10 years you need to look at a loan with very low upfront costs (APR just a little higher than Rate).

[buck183]

What are you guys seeing on a fixed rate 30 yr note for interest right now?

I'm getting ready to start building in the next month or two. Hope to lock in below 6% if possible. I think I may be able to pull it off. Need opinions though.

Buck

[Racegirl]

What are you guys seeing on a fixed rate 30 yr note for interest right now?

I'm getting ready to start building in the next month or two. Hope to lock in below 6% if possible. I think I may be able to pull it off. Need opinions though.

Buck


Im seein them at 6 and up ... but you can always buy down :bike:

[REDCHECKMATE]

RG your just too dam smart;)

[Racegirl]

RG your just too dam smart;)



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