I am admittedly biased, but utilizing an experienced Mortgage Broker is the best way to go, where you will be working with someone who has all the right wholesale conduits to deliver competitive pricing with superior and much faster service.
I agree with most all the comments above. Even the one about how a good mortgage broker 10+ years ago were hard to find. This was due to no regulation. Since then mortgage brokers are licensed and regulated by both State and Federal Government. In fact the mortgage broker has to go through stringent requirements which large bank employees are exempt from. This has catapulted the experienced mortgage broker to one of the best resources a homeowner can find for good financing.
Stay away from anyone who wants money up front to lock a rate. That is just unnecessary.
The mortgage broker can also get your purchase or refinance financing done in under 30 days, where others may take 2-3 months.
Get a few quotes, make sure you are comparing everything equally, ask for recent references and go with who you feel best about.
Background: We are selling our current home and want to buy a new house. We have excellent credit and a healthy savings with very little debt. Our negatives are my DH has only been at this job for about 1.5 years..... although he has been doing this same type of work for about 10 years.
Were not sure what banks are offering these days....I really hate this process ( Come in strip down lets look you over....were going to need a DNA Test, Blood test and will get back to you....maybe) I really only want to do this once so I need advice on who are my best options to go with and why. THANKS!
Off the top of my head Wells Fargo is the one they say is the best now in terms of closing quickly and staying on top of everything. Chase is good too.
The pre-qual process isn't that bad. Your bank statements can be printed out online, credit card statements and bank statements as well.
1.5 years is a long time in terms of home buying. I got in a flame war right here on Slickdeals from a guy who had a job for 21 days and was trying to buy a home. I said 21 days is not long enough in the same job to qualify for a home loan and the other guy was like, "Well how long should he be employed??" to which I didn't even bother to respond because it was such a ridiculous question.
I bought my condo last year. I could have went with a bank but for whatever reason did not. I don't know if they work off hours or not. I was referred to an independent Loan Agent who works with another financial agency to get your money. If you need advice sometimes this is the way to go.
First off, you can change your lender at any point, even after you have mutual acceptance. Many people do not know this. Technically speaking, you can even change your lender up until the day before funding but this is rare.
When you find a home you are serious about you can do a "Good Faith Estimate". This is an estimate that gives you a pretty good idea of what rates you will be charged, points to be paid, and fees to be delt. A lazy loan agent won't want to do one of these because it requires a little bit of work but if they want your business they will do it.
You might be able to pit one lender against another, although just because one lender has higher fees doesn't mean they are bad. Some lenders are faster than others at closing because they do their own underwriting. This is a good thing and something I'd be willing to pay for.
Bank of America is the worst bank. They will give you the lowest rates but will not close on time. They will make you jump through hoops you never knew existed. Get your rate quote from them so that you can use it as a leverage to get a better quote from someone else.
You will learn that there's a package for everyone. I used Redfin, the best online website for buying home in my area. I found 2 of the best Loan Agents and pit them against one another. From one of the loan agents he gave me 3 different quotes, 3 totally different scenarios, something I had never seen before.
Under one scenario I had to pay points, but the rate was lower. Under another scenario I didn't pay any points, but the rate was higher and some other numbers were adjusted as well. A good loan agent will give you options and let you choose the option that is best for your needs. His fees were a little higher than others but I appreciated the effort he made in presenting his case which was more than any other loan agent.
There isn't a set number for anything, fees and closing costs included. Don't listen to anyone who says that. It's all variable, your fees and closing costs will go up or down depending on what kind of options you choose for your loan and how much you can put down.
Last edited by Padmakumara; 05-06-2013 at 11:40 PM..
My personal opinion:
Stay away from Wells Fargo, I was going through the process with a Broker in 2009 on my 1st home and he was shopping Wells Fargo for me and unfortunately they just couldn't come through due to the PMI company they use so I was out the appraisal fee. I ended up with MetLife Home Loans, who I loved, but unfortunately is no longer around as they are now out of the Mtg business.
I refinanced with Amerisave 8 months ago and loved it, no hassle overall smooth process, they're very cookie cutter as far as their process. I'm purchasing a new home now and wanted to run some finances and questions by Amerisave before paying their $15 credit fee, and my mortgage contact there just couldn't give me the time of day, he'd email back but with very short answers as if my whole question wasn't read. I'd be weary about suggesting them for a purchase, I think where they really excel is in Refi's.
So I am currently in the process with GuaranteedRate. I couldn't be happier (so far) their process is going very smooth, and it looks like they're going to hit the 29 day closing I need (already received conditional approval from underwriting and have a week and a half till close). Their rates were the same as Amerisave, with a credit of maybe $300-500 less, so not that big of a deal to me for the service I'm getting, they also paid for my appraisal, which is cheaper than any of the 3 appraisals I've had done since 2009, I haven't paid them a cent yet.
dobby10 makes a very good point on delineating purchases from refi's.
With dozens of lenders available to me, I definitely direct the purchases to a handful of wholesale conduits I know I can count on for very smooth process and quick closings. The industry is constantly changing where there are now conduits that pledge a 25 day purchase closing and are specifically set up to deliver that promise. Good stuff compared to others who fall under that too big to fail mentality.
I'm in the process of buying the condo I've been renting from my landlord. I want a pre-approval letter to bring to our next meeting on Monday, so I went to my local credit union and they ran my credit and entered my data this morning.
I got the loan agent to run 2 scenarios: one that would involve me putting 20% down on a lower purchase price (no PMI), and one that will involve a higher purchase price and only 15% down (in this scenario I would pay about $10,000 to replace the furnace/air conditioner shortly after purchasing the suite), and I asked the loan agent to produce pre-approval letters for both. The owner and I will be talking price on Monday, so I wanted to know how both scenarios would work out in terms of the monthly payments.
I found it interesting that in the scenario in which I'd be putting 15% down, my credit union seemed to have a slightly higher interest rate than homeboxloans.com and guaranteedrate.com but the total monthly payment showed as being lower than both online companies. The difference was the PMI. My credit union is only charging about $30 per month for PMI but the online companies are charging almost double that, charging $50-something each. That ends up making a difference.
Unfortunately so do the closing costs. And the credit union has higher closing costs. Dealing with a local company might end up being worth the extra cost - not sure about that, still trying to decide on how much value that should have.
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