The Difference Between Wholesale and Retail Mortgage Rates

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Wholesale Vs. Retail Mortgage Rates Explained

We work with several banks and mortgage wholesalers that allow us to shop rates for our clients.  Being that we do all of the processing for these sources we receive Wholesale Rates which are discounted from Retail Rates (rates offered from bank branches, direct mortgage lenders, servicers etc.).

There can be a large variance (both positive and negative) between lenders on a daily basis on the Wholesale Rate as they compete for market share.  Being that we have several sources to choose from for our client we always have aggressive rate (and free floatdown) options.

Once we close a loan for our client the loan is then serviced by the bank, lender or servicing company.  At times they have a Retail division that may solicit the client or make it seem that they can "streamline the mortgage process" as they currently have the loan in their servicing department.  But, with any new loan the process has to start over from the beginning (as the majority if loans are sold to Fannie Mae, Freddie Mac or insured through VA or HUD).  It is also important to note that they only offer a Retail Rate and not the Wholesale Rate at that point.

Generally, the difference between a Wholesale conforming 30-year fixed-rate is .25% lower than a Retail rate and up to .50% lower on an FHA or VA loan (with the same fees).  Over the life of the loan that equates to a large amount of savings for our clients.

Also, as the sole-owner and loan officer I personally control our pricing model which eliminates another layer of "cost" and allows me to be able to offer even lower rates than the competition.

If you have any questions or would like a quick rate quote comparison feel free to contact me.

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Bob McCormick, President


Toll Free 800-328-0144 

www.McCormickLendingGroup.com

Residential-Portfolio-Private-Reverse

Lending in Arizona and California 

"Don't Overpay For Your Mortgage"

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