Mortgage Rates

Mortgage Rates and Pricing

"What is your rate today?" prospective borrowers ask when they call up a mortgage lender shopping for rates. Well, there isn't just one rate. There is a choice of rates and the rates are very similar from one lender to the next - perhaps identical.

A Loan Officer's Rate Sheet

Every morning a loan officer gets a rate sheet - or a number of them. Mortgage bankers get the rate sheet from their company. Mortgage brokers get rate sheets from a number of wholesale lenders. They come in across the fax machine, across the computer, or through various secure web sites requiring confidential user names and passwords.

On volatile days, there may be revisions to the rate sheets. There have been times when rate sheets were revised more than five times in one day.

These rate sheets are not designed for public view. They are for loan officers' eyes only because they represent the "cost" of a loan to the loan officer, not the cost to the borrower.

Below is a sample of one section of a rate sheet for thirty-year fixed rate loans.

Rate Cost
. . .
6.250% 2.000
6.375% 1.500
6.500% 1.000
6.625% 0.500
6.750% 0.000
6.875% (.500)
7.000% (1.000)
7.125% (1.500)
7.250% (1.875)
7.375% (2.125)
7.500% (2.375)


The rate sheet shows the interest rate and the "cost" to the loan officer, expressed in "points." One point is equal to one percent of the loan.

Pricing the Loan

Different rates have different costs. Higher rates don't cost as much as lower rates. This is because the lender is going to earn more in interest over the life of the loan, so it makes sense to charge less. Conversely, it makes sense to charge more for a lower interest rate, because the lender will earn less interest over the long term.

Zero points is called "par" pricing. Numbers in parentheses indicate "premium" or "rebate" pricing, meaning that instead of having a "cost," money is actually paid back to the loan officer and the branch for originating a loan at that rate.

Almost all loan officers are paid on commission. The amount earned by the loan officer and the branch is subject to a "split" -- just like real estate agents. Part of it goes to the loan officer and part goes to the branch. Any fees that are not part of the points go to the branch (or company) and are not subject to the split.

Quoting Rates to You

Before quoting you an interest rate, the loan officer will add on how much he and his branch want to earn. The branch or company sets a policy on how little that can be (the minimum amount the loan officer adds on to his cost) but does not want to overcharge borrowers either (so they set a maximum the loan officer can charge) Between that minimum and maximum, the loan officer has a great deal of flexibility.

For example, say the loan officer decides he and his branch are going to earn one point. When you call and ask for a rate quote, he will add one point to the cost of the loan and quote you that rate. According to the rate sheet above, seven percent will cost you zero points. Six and three-quarters percent will cost you one point.

In our example, at 7.125% the loan officer and branch would earn one point and have some money left over. This could be used to pay some of the fees (processing, documents, etc), which is how you get a "no fees -no points" mortgage. You just pay a higher interest rate.

Mortgage Lead Generation

Using PPC Search Engines To Generate Mortgage Leads

The fastest and most effective way to start getting quality website traffic to your website is by using Pay Per Click Ads. Two of the most popular PPC (Pay Per Click) search engines are Google Ad words http://www.google.com which are featured on many websites including the monster of all search engines GOOGLE and Overture http://www.overture.com which shows your listings on sites like Yahoo, AltaVista, MSN, and more!

PPC advertising offers you the best bang for your buck. Here is how it works:

You bid on specific keywords or key-phrases to have your ad come up when people search for that specific keyword. For example, when a person searches for "Refinance". If the person sees your ad and is interested and they click on it and you simply pay your bid amount.

You may bid $1 to get listed at the top of the search result, but your competitor could then bid 1.05 and outbid and move ahead of you. This does happen unless you are able to bid on less popular search terms that your competitors do not and still many people use.

Bids for the top positions vary from pennies to a few dollars, but most PPC search engines have keyword suggestion tools to help you find keywords and their search results to suit your budget. You may bid on as many keywords as your budget can handle. A general rule of thumb would be to aim for one of the top two positions for keywords with low bid searches and aim for top 5 for keywords with higher volume searches.

You must be careful though to bid within your means! PPC’s are all about conversion rates. For example, if you bid $2.00 per click and get 10 clicks and one mortgage lead from those 10 clicks, this means you paid $20.00 for that lead and have a 10% conversion. This is something you must figure out on your own if you are using PPC’s for the first time in order to be successful. If you were to sell that lead on refinancing their home and that lead was $20.00 you and I both know you made a killing! You have to spend money to make money. This is also is true with search engine placement.

Be sure that if you are licensed in only certain states that you bid on state specific keywords. Example. "Florida Home Loans" instead of "Home Loans". If not you will get tons of clicks for leads you can not use.

Finally, your ad should follow certain guidelines. You want to describe your product or service in your ad as precise as possible. Remember you are not looking for “random visitors” because you are paying for their click whether they become a lead/sale or not! Try to include the keywords in the subject that not only brings in good prospects for you but also use keywords and descriptions that will thwart "curiosity seekers" from clicking on your PPC ad.

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This article is provided by TheMortgageWire.com - Mortgage Industry News and Marketing Portal.

Mortgage Lead Management

Mortgage leads come in many formats and from many different channels. Most mortgage branches buy mortgage leads from different mortgage lead websites, marketing companies, and in house websites. The one thing that most offices are missing is a central point of control that maximizes the revenue potential of sales leads.

The fact is that only about 65% of leads are worked to the fullest extent. Many factors such as turnover & poor time management limit the potential of mortgage leads. Leads generated from any channel can be lost in the shuffle leaving revenue on the table. Drive up your ROI!

From research we have found the key points that most need in a mortgage lead management system - Check out some below!

Multiple lead format uploads and channel allocation - This feature allows you to upload leads from different mortgage lead vendors, and different in house channels by creating an upload template for uploading leads to the system.

Mortgage Lead Distribution - Upload leads and distribute to all or certain users. Redistribute leads to active users when deleting a current user.

Mortgage Lead Tracking - Inbox displays new leads assigned from admin/manager that are to be called as new leads. User can then assign call back dates, track closing dates, keep contact notes, and more!

Automatic Emails - Once a lead is added to the system, dropped from system, or set as closed the system will send an automatic email custom created by the admin/manager to each lead. This assures professional contact and follow up to all your borrowers. This email is managed by the admin and can be edited or turned on/off at anytime.

Reporting - Reporting is key to any business owner and will really track the production of employees and your mortgage lead channels. Some sample reports are new leads, leads dropped, leads closed, leads by state, leads in processing and with features to track all this by what channel or lead vendor.

Security - A highly powerful SSL and private bullet proof hosting by Red Hat Linux is the backbone of the system. This assures no data sharing or possible entries into your account.

Calyx Upload Template - Saving your lead to your pc in a Calyx upload template will allow you to upload your lead right to Calyx Point.

Mortgage Calculator - Discuss 3 loan scenarios online with the on the fly data. Compare 3 products to see what is best for the borrower.

Key Points to a Good Lead Management System!

Track employee performance with real time tracking and reports

Get true reports and ROI for all your mortgage lead sources Easily upload leads from all your mortgage lead channels

Assign leads automatically upon upload or manually each morning

Know your investment in Mortgage Leads is paying off and working for you

Enjoy less stress, relaxation and trust in your business operations

Generate more referrals and repeat business with excellent customer service

Close up to 20% more mortgage leads each year with a good lead management system

Along with this feedback we looked into several options online and found 3 Good choices available for the Mortgage office manager or Branch manager.

http://www.Leads360.com - Good site with a lot of features - A little complicated to use from our view and expensive.

http://www.LeadROI.com - Very similar to the Leads 360 site with same features and we found this option to be very expensive - Over $12,000.00 a year for 50 users and it goes up as your staff grows.

http://www.LeadApp.com - Does all the things that the Leads360 and LeadROI system does expect distribute leads with out actually logging in - LeadApp.com is set up where you have to log in upload leads and hit a buttom to distribute at one time or you can do manually based on Loan officer strengths - Very affordable at $5995.00 for a Lifetime license and as little as $2995.00 per year.

Article Source: http://EzineArticles.com/?expert=Jayson_Brock