Closing costs and mortgage brokers, and even who you get your loan from are not really related.

For instance, I use a mortgage broker in Seattle, someone I know personally.  He is finding me my loan, and a mortgage broker or brokerage firm will change a percentage of the loan amount.  It is often rolled into the loan itself.  A good mortgage broker will explain to you, in detail, about how they get paid, and what it's going to cost you.

Closing costs are not associated with the mortgage, really.  They are things like inspections, payments to the equity company, title searches, courier fees, etc.  In today's market, because it's a buyer's market, you can even ask the seller to pay all or some percent of the closing costs.  Your buyer's agent (a realtor working for YOU, and paid by the listing agent from part of the listing agent's commission) will explain what most of the closing costs will be, and your mortgage consultant will, also.

All of this preassumes that you're using a mortgage broker, and not going through a bank or mortgage lender.  Most 'brokers' are not lenders!  They only find you the best loan.

As far as options, in terms of loans, there are a variety of resources online that will give you information about what is out there, but it's up to you to determine what is best for you.

For example, you're like me.  You work at a job, you get a annual salary increase, but you're not going to be promoted with a $25K increase in base pay anytime in the foreseeable future.  A 30 year fixed rate mortgage with a payment you feel comfortable with, considering all your costs, will work fine.  For me, I'll be paying about $1250 a month which covers my mortgage, insurance and HOA or HomeOwner's Associate fees (I'm buying a condo).  I'm comfortable with that.  I'm also using a VA loan, which means no downpayment.  My interest rate is higher, though.

You may not be a veteren, and you may have some money set aside.  A FHA loan with 3.5% down might work for you.

You may be looking at a relocation with your company in three years, but you want a house now.  An ARM might be worthwhile for you.  Pay a lower interest rate for however many years, and then sell the property.  You pay less in monthly payments because of the lower rate, but you've limited yourself on the time you can stay there, because you need to sell the house before the interest rates reset.  ARMs and Subprimes were a huge part of the reason we're in the mess we are now, so fully, carefully and completely research those options.

Since I'm not a broker, I'm unqualified to discuss the details on these, but if you send me a private messgae, I'll give you the name of my broker and the company he works for.

Gary

Loan fees come in several flavors. Keep in mind that all up front costs associated with obtaining financing is really prepaid interest. The APR or effective interest rates is the true cost of financing. the effective interest rate calculation takes into account the loan note rate or interest rate and all direct loan costs.

The loan will have some third party fees which aren’t controllable such as courier and recording costs. Lender controllable costs will be itemized, lumped under headings such as points, origination, loan fee, or itemized and lumped. You may see lender fees itemized as processing or administrative. The lender may tell you those go to a different department. If it isn’t a third party fee it doesn’t matter what they call it. It is still a loan cost. They are itemizing their overhead and getting you to pay for it.

My favorite is the Yield Spread Premium (YSP). YSP is compensation paid to the broker outside of closing. YSP won’t be on your GFE. YSP will be on your HUD statement. It may not be called YSP. An ethical lender will disclose YSP to the client. Ethical lenders credit a portion of YSP to the client if the loan terms change. Redfin does.

Non disclosure of YSP is unethical and open for lender abuse between the YSP, points/origination, and market loan note rate after the rate lock.

Loans with no closing costs are created using the YSP to pay to borrower’s closing costs on a loan with a high note rate. Loans with YSP almost always have a higher mark up to the borrower than loans without YSP. What that means is the effective interest rate on a loan YSP will be higher than the effective interest without YSP.

Since this thread is in the Seattle section, I'd like to point out that Redfin has a mortgage offering for Washington State.  Similar to our Redfin Direct service for real estate, we bring transparency to the mortgage industry.  We charge a flat fee of $2,500 (appraisal, title, escrow are extra) per loan and pass any YSP along to you.  You can read more about our service in the mortgage section of this forum.

I not only work here, but I am also a client.  I used Warren, one of our loan originators, last fall to get a loan for my new house.  The service was top notch and the savings were huge.

Who are you getting your mortgage loan from?  -- Bank of America

What are your closing costs? - No closing fee

Try Bellevue DT Bank of America  - Jessica.. She is quick, realistic, reliable and will work for the best  deal for you..

Bbalkis,

On its face, the loan may appear to have no associated costs. The loan most certainly does. Loan costs directly associated with procuring the loan are nothing more than prepaid interest that will increase the effective interest rate or note rate. If the non loan closing costs are not present, then the costs are being wrapped into the effective interest rate with the associated loan costs. Those cots are paid from the YSP or the margin or wrapped into the loan amount. Either way the borrower is being for loan costs.

Investors provide capital to lenders based on the market rates of various financial markets such at the MTA, Euro, 30 yr Treasury, etc., risk, and demand.

In the case where a loan has no closing costs, the note rate of the loan is higher than the note rate of a loan with points. The effective interest rate of both loans may be the same.

I am familiar with the lending industry and underlying capital markets, indices, margins, risk, etc. there is no free lunch. there is a cost and it may not be apparent on its face. the person or institution borkering the loan for the investor providng the capital gets paid. the compensation may be points, loan fees, YSP and built into the interest rate on a "no cost or zero cost" loan. there is still cost.

BoA reflects higher interest rate due to no closing fee but this rate increase will not be more 0.1 to 0.2% in most cases. Some buyers would prefer to pay extra 100$ a month rather than paying more 10,000$ upfront.  You have to have more than 730 credit to be eligible with the lower interest rates on that offer. This is just an option for some.