Any advice for shopping around a Mortgage

[pdxtraveltips]

I'm need to get preapproved for a home loan in the next week or so. It is my second time buying a home. First go around was with our former credit union and will NOT be doing that again. This time I want to shop around for rates, fees, etc... From what I've seen so far those can vary widely. I sort of don't trust these guys since they ruined our economy 8 years ago. Any advice for shopping around?

 

[Sesq]

How is your credit? How much are you putting down (as a percent)? Fixed or ARM? How long do you plan to be in this house? Any military affiliation (VA loans)?

The usual suspects include Pen Fed, NFCU and others. I have used firstib in the past, though they sell the servicing. I have re-fi'd into ARM's and I am now in a HELOC, so I am variable rate tolerant. But I have a lot of equity, so its easy to accept a floating rate when the balance isn't too bad. I don't like escrow, though taking that out can impact the rate.

 

[Sunny]

Any lender can preapprove you and you don't need to use them for your final loan.

You can ask them for a GFE which will list their fees. You'll have to understand which ones are lender fees (variable between lenders) and which ones are estimates (e.g. county recording fee) which do not vary by lender in order to compare quotes between lenders. Each lender should be able to quote you their fees if you give them the parameters of rate, term, downpayment, etc.

 

[ElainePDX]

We had great luck and the best rate with our local credit union. DM me for details; maybe your bad experience CU is a different one than mine....? Also can recommend a local mortgage broker we used multiple times, who has always matched the best rate we found elsewhere. This time, with a refi, she tried but couldn't match the CU rate.

 

[JoeK]

Penfed, mentioned above, is great. They have one of the best rates around on their 5/5 ARM and the 30-year fixed. I'd need to know more about your situation to give a specific recommendation, but one of those two options would likely be your best bet in most cases.

 

[MickiSue]

Most lenders have rates that are nearly identical, if not identical. The biggest variants will be the fees and points, and they can really add up.

I've had luck using online mtge aggregators, where you input your information, and lenders contact you to offer their best rates/points.

One big way to save on fees is to buy your own title insurance. The lenders take a cut from the title companies if you use their title people, and it can be the difference of a couple hundred to close to a thousand dollars to use a good, independent one.

We did that when we re-financed, and for the lower fee, still had the closer come and do the paperwork at our dining room table. Probably can't do that with a new buy, but it certainly was nice.

 

[SC Trojan]

I think CashCall has some of the best rates. I never closed a loan with them, but they were always competitive.

I've used Sutherland Mortgage Services (basically from lendingtree.com) for a couple of loans. They were pretty dang cheap but they are pretty low budget. They were so cheap on one loan that Cash Call flat out told me that the loan they offered me was impossible as it was lower than their cost. Sutherland actually outsources all the loan officers to India. Everything went fine, but I kept thinking I was going to be a victim of identity theft from them.

Some people to avoid:

First off, I'd say avoid Quicken Loans. Supposedly they have great customer service but their rates are horrible. I remember having a conversation with them where they asked me "are you looking for the absolute cheapest rate or do you want a process that will go smoothly with great customer service?" I told them I wanted the lowest rate, which totally stumped them, haha.

I had a REALLY bad experience with a mortgage broker from Las Vegas, WJ Bradley Mortgages. My broker suggested them to me (which should have been a red flag) because she said they always get loans closed on time. Well, technically it worked out but they sort of screwed me over on the rate once it came past the point of no return on the loan and basically gave me a 1 day window to close the loan or lose my deposit.

 

[InstinctX]

Once you request online quotes, you'll start to get random offers in the mail or email from various lenders. I can't remember how I found CharterOne (Citizens Bank) when I was looking for a HELOC. This was during the housing boom. They offered me an insane rate of prime minus 1.75% !!!

 

[MickiSue]

Heh. We refinanced during the slump, and ended up using FHA--even with the MIP, the total was a few hundred/month less than our previous mtge. Our house had devalued by close to $200K. It's going back up in fits and starts.

So now, we get, on average of about 3 a week, offers to redo our FHA mtge because we're "eligible". Except, not so much. The loan has to be over a certain age, and ours is not.

 

[SC Trojan]

Once you request online quotes, you'll start to get random offers in the mail or email from various lenders. I can't remember how I found CharterOne (Citizens Bank) when I was looking for a HELOC. This was during the housing boom. They offered me an insane rate of prime minus 1.75% !!!

This can be good and bad. After doing LendingTree.com you will be absolutely bombarded by calls and emails from mortgage brokers. After going through that I sort of said never again and just do my own shopping around on it.

 

[credipig]

Closed on new new home last month. Initially applied for a VA loan through PNC and USAA. Both offered $50K short of what I wanted to borrow. I wanted approval for $250K.

Realtor recommended a mortgage broker. I didn't have much faith in a person recommended by a realtor, since their incentive is a referral kickback. I figured what the heck. I applied through the broker just to see what I could get. Well, I got all the money I wanted at a better interest rate - 3.5%, 30 year, fixed.

One thing I highly recommend - lock in the rate, and get it in writing from the broker. This should not cost anything. I have a feeling my broker may have "said" he locked the rate, but did not. By betting rates would continue to fall prior to closing, he could make money on the difference between the "lock" he quoted me and the lower market rate at closing time. Don't know for sure, but I never received any lock rate in writing. If this did happen and rates climbed prior to closing, I could have been out that "locked" rate.

My mortgage broker also told me there would be no funding or origination fee. The initial Good Faith Estimate showed $0 for origination fees. When I received the HUD-1 days before closing, there was a $995 origination fee. When I pointed this out, they changed the origination fee to $623. I didn't push the issue, because I really needed to close. It wasn't something worth holding up the transaction. I'm still debating whether to report it to state mortgage regulators, since there's a good chance he's doing this to all his clients. I researched the issue and found that the GFE for origination fees should not change at all on the HUD-1.

If you use a mortgage broker, ask him how he receives compensation for making a loan. Some receive an origination fee (paid by you). Some receive a fee from the entity that funds the mortgage. I think they can also make a loan at a slightly higher market interest rate, and then sell the loan at the lower market rate, receiving the difference in the form of a payment from the funding entity. I don't believe they should not be compensated by you AND the finding entity.

Bottom line - if a broker or anyone in the process tells you something that sounds too good to be true, get it in writing. It can even be something as simple as you emailing a question and getting a response. That locks (get it? them into what they said. It can also be used to pursue legal action afterwards.

 

[InstinctX]

The GFE is suppose to enable consumers have apples to apples comparison. I would report this incident.

 

[Bury]

Any recent data points on mortgage? I'm at 3.375% no points on 30-year fixed locked this month. It's with a large bank, and includes an eighth of a percent off for holding a relationship.

 

[AlaskanTraveler]

Any recent data points on mortgage? I'm at 3.375% no points on 30-year fixed locked this month. It's with a large bank, and includes an eighth of a percent off for holding a relationship.

That is pretty good. I always use Amerisave as a reference. Your quoted rates are better than Amerisave as long as you didn't pay any origination fees. Are you paying a 1% origination fee?

 

[dockers]

Kinda but not really OT - if you're going to submit info to a service where salespeople will call afterwards, it's worth it to setup a Google Voice number and have the calls directed there.

 

[AnyNameYouWish]

We went with Third Federal, it's a small bank, but very professional. Everything happened when and how it was promised. They have competitive rates but they also offer a low rate guarantee. They will beat a lower rate or give you 1k. Maybe check them out?