Mortgage Shopping

[lesmalheurs]

Hi guys,

Looking for an advice.

I got pre-approved 2 weeks ago for a home loan at Chase, but then changed my mind and stopped shopping around. If I am not planning to buy a property in the next 3 months, does it still make sense to apply at other financial institutions? If so, then what banks/credit unions would you recommend?

Regards.

[August26th]

Hi there,

Ideally, you want to do most of your mortgage shopping within a 2 week window, as then the multiple credit inquiries don't hurt your scores, and shouldn't affect your credit negatively. Credit reports are good for 90-120 days depending on the lender.

In your case, it might be wise to take the info you got from Chase (such as your credit score and the amount you're pre-approved for) and keep it in your back pocket. Then, once you find the home you want, you can shop around. Your credit will have to be pulled again with the lender you pan to work with, but that shouldn't be a big deal.

Happy to answer further questions if you have them.

[inlandandalucia]

Hi there,

Ideally, you want to do most of your mortgage shopping within a 2 week window, as then the multiple credit inquiries don't hurt your scores, and shouldn't affect your credit negatively. Credit reports are good for 90-120 days depending on the lender.

In your case, it might be wise to take the info you got from Chase (such as your credit score and the amount you're pre-approved for) and keep it in your back pocket. Then, once you find the home you want, you can shop around. Your credit will have to be pulled again with the lender you pan to work with, but that shouldn't be a big deal.

Happy to answer further questions if you have them.

Totally agree with your answer.

[srad]

I've done a lot of shopping around for mortgages.  On my last owner occupied loan i used Consumer Direct.  its an online company, best rates and fees by far.  When its time for you to buy, they are worth a call.

[Bikeguy]

Two schools of thought for mortgage brokers.

1) I'll make a killing and work very little.

2) I'll shrink my margins super low and make up for the small profits by doing many deals word of mouth.

IMHO, most brokers fall into category 1.

If you are buying in Michigan, PM me and I'll give you 2 names/places.

[JanF]

Do you pick your mortgage based on best rates? Do you care about the company's reputation and level or service at all? I've never bought a house before and I hear a lot of horror stories about mortgage companies....

[srad]

Do i care about a company's reputation or level of service at all? of course i do, i'm not using companies named  Big Tony's Credit House. I haven't heard of any true horror stories as in "i lost my escrow money due to my mortgage company's incompetence".    What i do hear is plenty of the usual, "its taken 3 additional weeks to close and they keep asking for more and more paperwork at the midnight hour".  That's why you do the research.

I tell you what though, i did look at using Chase bank years back (around 2010).  I don't remember the difference in fee's and rate vs what i went with, but i remember saying to myself wow, that's a terrible loan product.  Maybe they are better now, I haven't gone back to check.

[clarkfan1979]

When I bought a house in Florida I went with a local credit union that had the best rates. Their mortgage people didn't make a commission of the deal, so that was kind of cool. However, if we didn't close on the house they really didn't care. That part was very frustrating. They were a pain to work with, but in the end they had the best rates and it was worth it.

[Mr.GrowingMustache]

** explicit language :)

If your interaction with them is to just pay your bill and be done, then it was great. As with ANY other company out there. Also their online system is nice and shows you all your information.

My original loan was sold to Chase. If your interaction with them is to just pay your bill and be done, then it was great. As with ANY other company out there. Also their online system is nice and shows you all your PMI, tax, inshurance information.

Terrible morgage company once you need something done that will save YOU money: removing PMI, flood inshurance, refinance etc! I just hated how they treated me, they are a big corporation and just give you blank statements and if it doesnt make them $$ then you are out of luck.

I tried to remove my PMI by paying down my morgage to 80% LTV (loan to value). I had to pay $100 for a BPO (apraisal broker), and the estimated my house @ $185k, when the original purcase price was $220k (in 2010). The ass BPO had the audacity to call me back and tell me that he didnt realize that this wasnt a regular apprasal but a LTV bank aprasal and to remind him what improvement i've made to the property ($20k worth). I had realtors do market analysis and put my house @ $200k (whcih is what I expected, and I might have paid the difference to get to 80% LTV).

Then after wasting my time again with Chase I told them to go F themselves and refinaced with another morgage company for 3.75% with $499 flat fee closing cost! They appraised my house at $220k hahaha. So whatever benefits the morgage company goes.

Just for shits and giggles I called Chase to see if I can refinance my house with them. The "phone agent" did a 2 minute quick search and told me that a 2 bed, 1 bath similar houses sold for $150k in my neghbourhoond and I would need to pay the difference, $9k worth of closing costs, and the rate was 4.5%. Yeah sure, I've seen those $150k pieces of shit forclosures on shit streets with floors like rolling hills, and "oh my" those refinance numbers.... almost got me.

Go fuck yourself Chase!

I let my $$ speak and closed my "savings account" with them also because of this. I'll probably close my checking account next and just leave my credit cards.


Moral of the story. Assume that ALL morgage companies will treat you like a POS once you sign up with them. Find the best deal possible to begin with, learn the rules of their contract.

[CptJack83]

Don't waste your time shopping a rate until you have a signed purchase contract and are ready to actually lock something in.  Get a pre-approval letter then sit tight until you have a contract.  Maybe get the names of a few lenders so you are prepared when the time comes. 

Shopping rate prior to locking in is worthless.  For one, rates do actually change from one day to the next and some lenders actually do have "specials".  Just because one lender had the best rate today, doesn't necessarily mean they'll have the best rate 2 weeks from now.  The biggest reason though, is you'd actually have no idea if that broker/lender was telling you the truth about their rate.  If you call a broker/lender, and tell them you are just shopping around and don't even have a house/contract yet.  Many of them won't even tell you the honest truth.  That lender knows you are not going to be able to lock in that day, so they could just tell you some arbitrarily low rate.  Then you might assume, wow ABC loans has the best rates.  So 2 weeks later you call him right back when you have a contract and he tells you his actual rate, which you think, well that's probably the best rate out there...you can't accuse him of lying before because rates do change everyday and they very well could/would be different in 2 weeks time...anyway shopping for something you can't actually "buy" is generally a waste of time.  But definitely check a few places as rates will vary widely.

RE Chase.  Their business model is not to have the best lowest mortgage rates.  They want to build as big of a customer base as possible through mainly free services (checking accounts etc)  Then they can cross sell higher margin products (Mortgage, Investments etc) to that captive audience.  Many people just walk into a Chase bank for their loan because "that's where they bank"  They price their loans to maximize revenue (like any company would really)  Sure they know a few customers will balk at their rates and go somewhere else, but they will cross sell enough clients where they come out ahead.  And like a previous poster said, if you have low margins you HAVE to do a ton of volume if you actually want to make any money.