I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I want to give you the exact framework for verifying whether any mortgage broker — including me — is actually getting you the best rate available. Call (800) 239-1103.
The Honest Answer First
Most borrowers have no idea whether they’re getting the best rate, because they’ve never been told how rate pricing actually works. They get a quote, it sounds reasonable, and they move forward. That’s how brokers and loan officers who aren’t working in your interest stay in business.
Here’s what I’m going to tell you: the tools to verify your rate exist and are mostly free. You just need to know what to ask and what to look at.
How Mortgage Rate Pricing Actually Works
Every mortgage lender publishes a daily rate sheet. This rate sheet shows the “par rate” — the rate at which the lender makes neither extra profit nor loss on a loan — plus a grid of rates above and below par with corresponding costs or credits.
If you take a rate above par, the lender pays a premium (called the yield spread premium, or YSP) back to your broker. That premium is broker compensation — it comes out of your loan economics. If you take a rate below par, you pay discount points upfront to buy the rate down.
A broker who is working in your interest shows you these options transparently and lets you choose. A broker who is not might push you toward a rate that maximizes their YSP without disclosing that’s what’s happening.
What You’re Legally Entitled to See
Within 3 business days of submitting a loan application, every lender must send you a Loan Estimate (LE). This is a standardized government form — it doesn’t matter which lender or broker you use, it looks the same. Here’s what to look at on the LE:
Page 1, Section A (Origination Charges): This shows broker fees. If there’s a line for “Broker Compensation” or “Origination Fee,” that’s what you’re paying the broker directly. Some brokers charge this in addition to YSP. On a $900,000 loan, 1% origination = $9,000 going to the broker on top of whatever rate premium they’re building in.
Page 2, Section A, Line 01 (Lender Credits): If this number is negative, it means the lender is paying you credits — usually because the rate you’re taking is above par and the lender is sharing the YSP back to you. A good broker will structure this correctly so lender credits offset closing costs.
The Interest Rate (Page 1, top right): This is the rate you’re being quoted. The question is whether it’s close to par for your loan profile, or whether you’re taking an elevated rate that the broker is profiting from without your knowledge.
The Five Questions That Reveal Everything
Ask your broker these questions directly. Good brokers will answer without hesitation. Evasive answers tell you something important.
1. “How many lenders did you submit my loan to, and which one offered the best rate?” A broker with access to 30–40 lenders should be able to name at least 3–4 they evaluated for your file. If they submitted to one lender, or can’t remember who else they checked, that’s a flag.
2. “Is this the par rate for my loan profile, or am I taking an above-par rate?” A transparent broker knows immediately and can answer directly. Par means the broker earns no extra compensation through the rate itself. Above par means they’re earning a premium — which isn’t necessarily wrong, but should be disclosed.
3. “What is your total compensation on this loan?” Federal law requires brokers to disclose their compensation. They should be able to tell you their total comp — whether it comes from borrower-paid fees, lender-paid YSP, or a combination.
4. “Can you show me the rate sheet for the lender you’re using?” Some brokers will share this; many won’t because it’s considered proprietary. But even asking this question changes the dynamic — a broker who knows you understand rate sheets will be more careful about the pricing they present.
5. “What would my rate be if I paid zero points and received zero lender credits?” This is the cleanest way to identify par rate. The answer gives you a baseline. From there, you can decide whether to pay points to go lower or accept a higher rate with lender credits to cover costs.
Green Flags: Signs Your Broker Is Working for You
After 26 years in this business, here’s what separates brokers who are genuinely trying to get you the best deal:
They show you multiple rate options — at minimum: the par rate, a rate with points to go lower, and a rate with lender credits to offset closing costs. They explain the break-even on each. They proactively mention refinancing scenarios. They disclose their compensation without being asked. They tell you which lenders they shopped and why they chose the one they did.
They also tell you when another lender’s program is better for your specific situation even if they make slightly less on it. I’ve done this with clients when a competing wholesale lender had a rate promotion that was genuinely better. That’s the job.
Red Flags: Signs Something Is Off
The broker presents only one rate with no alternatives and becomes defensive when you ask about options. They can’t explain why they chose this lender over others. They use urgency (“the rate expires today”) to prevent you from shopping. Their Loan Estimate shows a large origination fee plus a rate that’s elevated above what you’d expect — meaning they’re getting paid twice, from you and from the lender.
They quote you verbally and delay sending a Loan Estimate, because the LE would make the pricing visible. And perhaps most telling: they get irritated when you mention that you’re comparing quotes from other lenders. A broker confident in their pricing welcomes comparison.
How to Actually Shop for the Best Rate
Get Loan Estimates from at least two or three sources: a direct lender (a bank or credit union), a large national broker, and a local broker. All three LEs use the same government form, so you can compare them line by line. The right comparison is the all-in cost on Page 2 (total closing costs) combined with the interest rate on Page 1 — not just the rate in isolation.
Be aware that rate quotes change daily with bond markets. To compare apples to apples, get your competing quotes within the same 24-hour window if possible.
When you call me at (800) 239-1103, I’ll tell you exactly which lenders I’m submitting to, what my compensation is, and give you the par rate, the rate-with-points option, and the rate-with-lender-credits option. Then you decide. That’s how this should work.
A Note on Wholesale vs. Retail Pricing
Wholesale brokers (like me) submit loans directly to wholesale lenders who sell only through brokers, not to the public. Wholesale rates are typically 0.25–0.50% below the retail rates banks quote, because you’re not paying the bank’s overhead and retail margin.
On an $800,000 loan, 0.375% in rate translates to roughly $250/month in payment difference. Over five years, that’s $15,000 — real money. The question isn’t just whether your broker is ethical; it’s whether they have access to wholesale pricing in the first place. A broker without strong wholesale relationships can be perfectly honest and still not get you the best available rate.
Frequently Asked Questions — Finding the Best Mortgage Rate
How do I know if my mortgage broker is giving me a good rate?
Ask your broker three questions: How many lenders did you submit to? Is this the par rate or above par? What is your total compensation on this loan? A broker who answers all three clearly and without defensiveness is working in your interest. Compare the Loan Estimate you receive (a standardized government form) against at least one other source — a bank or another broker — within the same 24-hour window. The most useful comparison is the total all-in cost on Page 2 combined with the interest rate, not just the rate alone.
What is a “par rate” in mortgage lending?
The par rate is the interest rate at which a lender makes neither extra profit nor loss on the loan — it’s the baseline pricing for your loan profile. Rates above par generate a yield spread premium (YSP) that goes to your broker as additional compensation. Rates below par require you to pay discount points upfront. A transparent broker can tell you the par rate for your profile and show you options above and below it, so you can decide whether to pay points for a lower rate or accept a slightly higher rate in exchange for lender credits that reduce your closing costs.
Should I get multiple mortgage quotes, and does it hurt my credit?
Yes — getting 2–3 mortgage quotes is one of the most financially impactful things a borrower can do. Multiple mortgage credit inquiries within a 45-day window are treated as a single inquiry by FICO under its “rate shopping” logic, so the credit impact is minimal. The potential savings are significant: even a 0.25% rate difference on an $800,000 loan is roughly $167/month, or $10,000 over five years. Request Loan Estimates from all lenders on the same day so you’re comparing identical rate environments, and compare the full Page 2 cost totals rather than just the rate.
What fees should I look for on a Loan Estimate to spot overcharging?
On Page 2 of the Loan Estimate, Section A shows origination charges — fees paid directly to your lender or broker. A combined origination charge above 1% of the loan amount ($8,000+ on an $800,000 loan) warrants scrutiny, especially if you’re also taking an above-par rate. Section B shows third-party service fees (appraisal, title, etc.) — these are less controllable but should be comparable across lenders. Red flags include: broker fees of 1–2% plus an above-par rate (double dipping), unusually high processing or underwriting fees, and vague fee descriptions that don’t correspond to standard charges.
Is a mortgage broker required to show me the best rate they have access to?
Legally, mortgage brokers must act in accordance with their fiduciary-like duty to borrowers under RESPA and applicable state law, and must disclose their compensation. However, there is no federal requirement to show you every lender’s rate sheet or guarantee they submitted to every available lender. The practical safeguard is shopping: if you compare Loan Estimates from multiple sources and your broker’s pricing is competitive, you can be reasonably confident you’re getting a good deal. An honest broker will proactively explain their lender selection and compensation — you shouldn’t need to extract this information through adversarial questioning.
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
