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Our Rates Are Lower; How & Why? Rate Surveys & Lending Channels

rate surveys INTEREST RATES AT JVM

We want to address interest rates again b/c we sometimes get compared to some of the large banks offering promotions.

LOWERED OUR RATES

First and foremost, our rates are now lower than ever, relative to our competitors.

We have been able to lower our rates for several reasons: (1) New Investors: we have garnered new investors offering more competitive options; (2) More Efficient: we are more efficient and are able to operate on thinner margins; and (3) More competitive: we simply lowered our rates to be even more competitive.

RATE SURVEYS – HOW WE KNOW WE’RE COMPETITIVE

We formally survey the interest rates of numerous competitors several times each week, so we know for certain that our rates are not only competitive but often much better than many lenders.

When people tell us otherwise, they are often either misquoted or not taking into account all of the information that influences rates (credit scores, down payment, loan amount, property type, occupancy, lock period, etc.).

THREE PRIMARY MORTGAGE LENDING CHANNELS

The three mortgage lending channels include: (1) Large commercial banks and credit unions; (2) Mortgage banks (like JVM Lending); and (3) Brokers.

Large banks like Wells Fargo, B of A, Citi, etc. all have access to deposits and a very low cost of funds. As a result, they sometimes can offer lower rates for large loan amounts. They of course cannot begin to touch our service levels or appraisal quality. I should add that we have not lost a loan to a large bank in several months (since we lowered our rates).

Mortgage banks are in business solely to fund mortgages (they don’t hold deposits), and they all use large credit lines to fund loans before they sell them on the secondary market. We have internal access to many of our competing mortgage bank’s interest rates and we use that info to make sure our rates remain ultra-competitive.

Brokers do not underwrite or fund their own loans, but instead submit all of their loans to other mortgage banks for underwriting and funding. We used to be in the broker channel but left it b/c of appraisal quality and inconsistent service. We still, however, get “rate sheets” every day from most of the major wholesale lenders (that accept loans from brokers). We again use those rate sheets to ensure we are always ultra-competitive.

The mortgage market is contracting and getting much more competitive, and we are more ready than ever.

Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646