CBS News
4 questions to ask before using a mortgage broker
Due to stubborn inflation, purchasing a home today is much more expensive than it was four years ago, even with inflation cooling in recent months. In fact, the median price of homes in the U.S. reached $442,525 in June, according to Redfin, which is a 4% increase compared to last year. On top of that, today’s mortgage rates remain elevated, which makes buying a home even more expensive. As of July 24, the average 15-year mortgage rate is 6.32%, while the average 30-year mortgage is 6.86%.
Because of today’s high home prices, people are looking for alternative ways to save money on their home purchases, which could include using a mortgage broker. After all, a broker often has access to several lenders, which means they may have a better chance of saving a consumer money than a direct lender. However, before you use a broker, you should ask some questions. We spoke to some experts to learn more.
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4 questions to ask before using a mortgage broker
Before using a broker to save money, experts say to ask these four questions.
Are you a self-employed borrower or a W-2 employee?
Some experts recommend asking yourself a few questions before deciding whether to use a mortgage broker for your home loan.
Phil Galante, mortgage broker and certified divorce lending professional at ProMortgage, says the first thing to do is to consider whether you’re a self-employed borrower or W-2 employee.
“If you’re a W-2 earner with good credit and a high down payment, or you’re a borrower who needs a Jumbo loan, a bank may be a better option,” according to Galante. However, he says that if you’re self-employed or in a more challenging situation a broker will often have a wider variety of loan options available to you.
Start exploring your home lending options here today.
Are they willing to negotiate their compensation?
Galante says working with a broker can often save consumers money because they have more flexibility when negotiating their compensation. So, before you work with one, ask the broker if they’d be willing to lower their compensation to save you money.
“If they decide to lower their compensation, you as the borrower can pay less in closing costs than with a direct lender,” Galante says. “Brokers often have better rates than direct lenders for conventional conforming loans, which are home loans under the Federal Housing Finance Agency’s (FHFA) maximum loan limit,” he says.
Do you have a referral?
Not all mortgage brokers are created equal, says Sarah Alvarez, Vice President of Mortgage Banking at William Raveis Mortgage. As a result, she recommends asking your real estate team and friends for a referral.
If you’re unable to get a referral for a broker, read reviews on review websites like the Better Business Bureau and Trustpilot. Doing this can help you learn what other consumers say about their experience with a certain broker.
Is the broker licensed to do business in my state?
Before you do business with a broker, check to see whether they’re licensed to do business where you intend to purchase the home. You can check this by visiting the National Multistate Licensing System (NMLS) website and searching for the broker’s name.
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How to decide between a broker and direct lender
Before using a mortgage broker to buy a home, experts say you should consider the benefits and drawbacks of taking this route instead of using a direct lender.
According to Galante, direct lenders, such as banks and credit unions, have more conservative underwriting guidelines and more control over the loan process (processing, underwriting and closing). As a result, he says this control can speed up the overall process. So, choosing a direct lender might be the ideal choice if you want to close on a home loan as fast as possible.
On the other hand, Galante says brokers often have access to a wider variety of loan programs by acting as intermediaries between borrowers and lenders.
“Each lender has their own underwriting guidelines, strengths and weaknesses and processes and procedures. A good broker successfully navigates the traits and characteristics of each lender as they work with on your behalf,” Galante adds.
He also says direct lenders can be a better choice than brokers if you have stellar credit. Plus, if you’re taking out a jumbo loan, using a direct lender is ideal because they usually offer lower rates, says Galante. A jumbo loan is a loan that exceeds the FHFA’s maximum loan limit, which ranges from $766,550 to $1,149,825 depending on where you live, says Galante.
How to save money on a mortgage now
While working with a mortgage broker could save you money, it’s not the only way to get a lower mortgage rate in today’s economy.
Some other steps you can take include shopping around, improving your credit before applying and buying mortgage points. That said, before you buy mortgage points to lower your rate, Alvarez says to do the math. “In many cases, purchasing mortgage points to lower your rate doesn’t make sense today,” she says.
That’s because, in her opinion, you are unlikely to realize the savings of the slightly lower rate. Instead of doing this, she recommends putting extra funds toward closing costs for a refinance down the road.
The bottom line
In today’s economy, working with a broker could save you money. That’s because a mortgage broker’s job is to shop the market and make sure that you’re getting the best rate and mortgage product available for your situation, says Alvarez. However, before taking this path, you should compare the cost of alternative options, like working with a direct lender via a bank or credit union. In addition, you should explore other ways to secure a lower mortgage rate, such as applying for a shorter-term loan if you can afford higher monthly payments or shopping around on your own.
Start shopping for a low mortgage rate online today.
CBS News
1 monkey recovered safely, 42 others still remain on the run from South Carolina lab
One of 43 monkeys bred for medical research that escaped a compound in South Carolina has been recovered unharmed, officials said Saturday.
Many of the others are still located a few yards from the property, jumping back and forth over the facility’s fence, police said in a statement.
The Rhesus macaques made a break for it Wednesday after an employee at the Alpha Genesis facility in Yemassee didn’t fully lock a door as she fed and checked on them, officials said.
The monkeys on Friday were exploring the outer fence of the Alpha Genesis compound and were cooing at the monkeys inside. The primates continued to interact with their companions inside the facility on Saturday, which is a positive sign, the police statement said.
Alpha Genesis CEO Greg Westergaard relayed that efforts to recover all the animals will persist throughout the weekend and for as long as it takes, the statement said.
Westergaard told CBS News on Thursday that a caretaker inadvertently failed to secure a door at the enclosure, allowing the monkeys to roam free.
“It’s really like follow-the-leader. You see one go and the others go,” he said. “It was a group of 50 and 7 stayed behind and 43 bolted out the door.”
Westergaard acknowledged that it would be a long process to get them back and that they didn’t want to chase the monkeys because that would spook them and make them run away.
“We’ve got them very close,” he told CBS News. “This is all like what we want to see.”
The monkeys are about the size of a cat. They are all females weighing about 7 pounds.
Alpha Genesis, federal health officials and police all said the monkeys pose no risk to public health. The facility breeds the monkeys to sell to medical and other researchers.
Alpha Genesis provides primates for research worldwide at its compound in Yemassee, about 50 miles (80 kilometers) northeast of Savannah, Georgia, according to its website.
CBS News
American nurse killed in Budapest while on vacation, Hungarian police arrest suspect
A 31-year-old American tourist was killed while on vacation in Hungary’s capital, and the suspect, a 37-year-old Irish man, has been arrested, Hungarian police said Saturday.
The victim, Mackenzie Michalski was reported missing on Nov. 5 after she was last seen at a nightclub in central Budapest.
A Facebook group called “Find Mackenzie Michalski,” created on November 7, said Michalski, went by “Kenzie.” The group confirmed her death in a statement on Friday, thanking U.S. and Hungarian authorities for “their prompt attention, diligence, care, and consideration.”
Police launched a missing person investigation and reviewed security footage from local nightclubs where they observed Michalski with a man later identified as the suspect in several of the clubs the night of her disappearance.
Police detained the man, an Irish citizen, on the evening of Nov. 7. Investigators said that Michalski and the suspect met at a nightclub and danced before leaving for the man’s rented apartment. The man killed Michalski while they were engaged in an “intimate encounter,” police said.
The suspect, whom police identified by the initials L.T.M., later confessed to the killing but said it had been an accident. Police said that he had attempted to cover up his crime by cleaning the apartment and hiding Michalski’s body in a wardrobe before purchasing a suitcase and placing her body inside.
He then rented a car and drove to Lake Balaton, around 90 miles southwest of Budapest, where he disposed of the body in a wooden area outside the town of Szigliget.
Video released by police showed the suspect guiding authorities to the location where he had left the body. Police said the suspect had made internet searches before being apprehended on how to dispose of a body, police procedures in missing person cases, whether pigs really eat dead bodies and the presence of wild boars in the Lake Balaton area.
He also made an internet search inquiring about the competence of Budapest police.
Michalski’s parents are currently in Budapest, police told The Associated Press.
Friends posted condolences on the Facebook group of candles. Michalski was a nurse practitioner, the social media post said, who used “her humor, positivity, and limitless empathy to help heal her patients and encourage family and friends alike.”
CBS News
Severe droughts threaten sustainable catch of the Amazon’s giant fish, the giant pirarucu
Two years of record-breaking drought have dealt a heavy blow to what is arguably the Amazon’s most successful sustainable economy: the managed fishery for the giant pirarucu.
In Brazil´s Amazonas state, almost 6,000 riverine dwellers authorized to fish have reported a sharp drop in production and rising costs. They are demanding aid from the federal government and debating how to adapt to climate change.
Last year’s catch totaled 70% of the government-authorized quota of 100,443 fish. This year could see an even steeper decline, since many communities still haven´t been able to fish. The season runs from June 1 to Nov. 30.
Pirarucu managed fishing began in the Amazon 25 years ago in the Mamiraua region and has since expanded. It helped the Amazon’s largest fish escape risk of extinction and is now an important source of income for locals in 10 sustainable conservation units and eight Indigenous territories, where deforestation is close to zero.
Unlike other aquatic species of the Amazon, such as river dolphins, the pirarucu — also known as arapaima — historically have proven resilient to drought and climate change. But low water levels are making it extremely difficult for fishers to transport their catch from remote lakes to major rivers and onto cities.
It’s a mammoth task. The pirarucu, which can weigh up to 200 kilograms (440 pounds), lives in large lakes that during flood season are often connected to major rivers. Fishing typically occurs when water levels begin to recede, making it easier to trap the fish and transport them out in small boats or canoes. In several areas, however, water levels dropped so quickly that this connection was cut off before fishing could begin.
In the São Raimundo community in the Medio Jurua region, fishing is scheduled to start Saturday, a two-month delay — a common situation this season. As a result, Coletivo Pirarucu, an umbrella organization that represents 2,500 riverine and Indigenous families, has requested that the federal government extend fishing season until the end of January.
Even in large rivers navigation has become problematic, raising costs and uncertainty among fishermen. It usually takes three to four days to transport fish from Carauari municipality — a major pirarucu producer — to Manaus, the Amazon´s largest city. During the peak of the drought, the trip increased to 10 days, and the freight price has doubled.
Tough as pirarucu are, they are not immune to climate change, according to researcher Adalberto Luis Val from the National Institute for Amazonian Research. He says rising temperatures and severe droughts are exacerbating the “death trio” for all fish: warmer water, more CO2 and less oxygen.
The pirarucu has evolved to breathe air but is far from invincible.
“No fish can regulate body temperature,” Val said. “Then there’s water scarcity. As its level drops, you start to get a high amount of suspended material, leading to sludge buildup. It sticks to the gill area, blocking the processes that occur there.”
Fearing deteriorating conditions in the following decades, Coletivo Pirarucu contends that the fishermen should be entitled to compensation for losses caused by climate change. “This crisis not only challenges the resilience of communities but also highlights the urgent need for climate change adaptation and mitigation strategies,” the nonprofit stated in an open letter last week.
In an e-mail response, James Bessa, a federal official overseeing pirarucu management, said that Ibama, Brazil´s environmental agency, is working with other public bodies and local fishing associations to reduce the impact of extreme events like droughts and floods. He said there are plans to start scientific studies and closer monitoring to provide insights into ways to support riverine and Indigenous communities in sustaining their fishing activities.
Adevaldo Dias — a riverine leader who presides over the Chico Mendes Memorial, a nonprofit that assists traditional non-Indigenous communities — argues that adopting additional public policies to help the fishermen is a matter of climate justice.
“The Indigenous and riverine peoples have minimal impact on the environment,” Dias said. “We know that conserving the forest benefits both us and those outside it. And when extreme climate events occur, they are the most vulnerable.”