Don’t just shop for a mortgage – play moneyball.
Frugal, focused lender + Lean, smart broker = Always a win for the borrower.
“Moneyball” is a story about how a guy took a new approach to major league baseball talent by focusing on one underutilized statistic: on base percentage or “OBP”. The hypothesis was that if you didn’t care about how your players got on base, you could win baseball games and have successful seasons. It was proven right.
In the mortgage business, there is one key metric that determines the fees you’ll pay a lender for your mortgage, because it’s the biggest expense category for nearly every mortgage banker and broker in our industry: marketing. The cheesy local used car guy that used to be all over TV is back, selling mortgages during the game with a catchy website address. You can’t visit a website or watch the news without MassiveLenderDotCom making a pitch. For most in this business, these expensive endeavors can add up to $1,000-2,000 per closed loan.
To be fair, our marketing cost isn’t $0. We have a website, and business cards, and some other discreet little tools to help keep us connected to our clients so on a per-loan basis we average about $35-40 per closed loan. So when you see the fee differences between our loan estimate and theirs, you now know why. But this is only half of the moneyball analogy.
Our primary partner is United Wholesale Mortgage (UWM), the largest wholesale-only lender in the country, whose stock is traded on the NYSE. Key to their market position is “wholesale-only”; most wholesale lenders are also retail lenders marketing direct to consumers and incurring similar expenses thus offering no particular competitive cost benefit over one another. UWM is different – it doesn’t market its products directly – its partner brokers (like us) do.
By eliminating the vast bulk of marketing costs, UWM is able to offer the best rates and programs in the business through brokers like us. While many other brokers are themselves recouping big marketing and lead costs with every loan, we stay out of this fray because our happy clients share us far and wide and keep our marketing costs low.
See? Smart, lean lender + Smart, lean broker = Moneyball for your mortgage. For a better and more quantified version of this story, complete our application and request a loan estimate for yourself. You’ll be glad you did.