Author Topic: mortgage basics - where to shop for one  (Read 903 times)

StressLess

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mortgage basics - where to shop for one
« on: April 25, 2017, 09:15:59 PM »
Hi,

I've tried finding a reliable source, but most places seem to be biased.

Wondering what peoples thoughts are for the best deal for a person who is an excellent candidate for a traditional mortgage (ie solid income, excellent credit, 20% down)

1) Bank
2) Direct Lender
3) Mortgage broker

Ive been leaning towards a direct lender (home bridge)

Can someone help a newbie out in this department?

Scortius

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Re: mortgage basics - where to shop for one
« Reply #1 on: April 25, 2017, 11:34:22 PM »
Just went through this ... today!

I found that as a borrower with great credit, the differences between any lender were minimal.  I went WAY overboard and got too many quotes, it was stressful and didn't help.  They all offered the same rate, the only difference was their fee and service.  In the end I think I even went with one of the more expensive options because the differences were so small and I wanted to stay with our credit union. 

Make sure you have estimates for homeowner's insurance fees, property tax, and itemized buyer vs. seller paid closing costs.  A purchase agreement helps here.

I would start with your bank/FCU.  They can give you a quick quote, a pre-qual letter, and an idea of what fees you can expect to pay.  Ask your bank if they offer member discounts or incentives.  Make sure you're clear about points or no points so that all your subsequent offers line up.  I told people I would consider a small number of points if the break even date was 5 years or less, otherwise no.

I would get a second quote from one online lender, just to compare the fees.  For us, the online lender quoted a much smaller rate, but then when you looked, the monthly P&I was almost exactly the same.  Ask friends for referrals for brokers, although if you trust your agent, that's fine too.  They can match the bank's offer and beat it on fees.  They probably won't match the online offer.

If you're closing on a house with a purchase agreement, the next step is to make sure that the loan servicing company will 1) be able to close on time, and 2) ideally chose a local appraiser.  You don't want your house to be under-appraised!  Or maybe you do as a buyer if you think you can talk the sellers down on price with the threat that you walk away.

Then, that's it.  Pick one.  They should all be pretty close.  Consider who you will be paying over the life of the loan and ask each lender who they sell loans to (if you care).  Pay attention to your APR and your closing costs needed at the time of servicing.  Those are the two basic numbers that matter. 

StressLess

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Re: mortgage basics - where to shop for one
« Reply #2 on: April 26, 2017, 04:21:03 AM »
this is great thank you for sharing.

makes sense, sounds like basically your credit worthiness is going to determine the specifics of the rate but helps to shop around to make sure you're not getting ripped off as a sanity check.





Aunt Petunia

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Re: mortgage basics - where to shop for one
« Reply #3 on: April 26, 2017, 05:20:29 AM »
Credit union or small local bank!!! (If you can)

Had refinanced my old house with my credit union, using something called a first-lien home equity. (Much lower closing costs than refinancing to another mortgage). My biweekly payments actually got applied immediately. They unfortunately couldn't do my new house because it is zoned agricultural, so I had to go to a mega bank for this one. I got a good rate, but then I found out that when I make my first biweekly payment of the month, they just hold it until they get the second one, so I am still paying them interest on that money for another 2 weeks.  It takes away most of the benefit of paying biweekly. I am also constantly bombarded with advertising from this bank for their credit cards, insurance products, etc. Grr.