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How important is it to shop around for mortgages? How many places would you suggest trying? What is the average rate now? We have good credit (750-800) so wondering what we can expect?
You should expect a mortgage banker or broker to talk you through the process, before pressing for personal information to do a credit check.
Preapproval should take a matter of minutes. Loan committment will be reserved until you have a contract and the lender does an appraisal.
You should expect direct answers to your questions. You should work with someone who has the patience to guide you, and help you avoid surprises. It is like picking any other professional. You need to 'click' to some degree.
Also, ask your mortgage rep if he/she goes to the closing. The best service providers go to all closings possible. This helps if there is a last minute question regarding the loan documentation and the HUD1.
Loan reps who skip closing leave it to the attorney and agents to resolve loan questions they shouldn't be answering.
Any good agent knows at least a handful of mortgage lenders, bankers and brokers, who give great service with integrity and reasonable costs.
I like lenders with in-house underwriting, as you can get a quick response from the real decision makers.
That said, some brokers do an excellent job with preapprovals, and work routinely with lenders who recognize that. These brokers tend to provide great results.
Reasonable costs? I don't believe that it is true that "You get what you pay for." But, I absolutely believe, "If you don't pay for it, you don't get it." Shopping only on the basis of teaser low rates and projected fees may be hazardous to your wealth.
It was worth shopping for mortgages when we bought our home 5 years ago. It is also worth negotiating on the various fees and terms. The rates varied some, as did the closing cost fees. By comparing different options and negotiating with the different mortgage providers based on what the others were providing, we ended up with a better deal than what any single provider was initially offering (e.g., lower rate without raising the closing costs, and a no-escrow account).
The only thing that I can recall is the title insurance, which I think runs about 1% of the home value. But, it's been a few years since I bought a house. Once you find a lender, they should be able to provide you with a "truth in lending" statement. This will cover their fees. You can also talk to your realtor about other fees that are generally common in this area.
If there's ANY way that either of you could get membership to a Credit Union, I would definitely check into that. In our experience, they've always had the best rates on loans (houses, cars, etc.).
When checking mortgages, I'd forget the newspaper. Most of those rates are about a week old.
I'd go with a recommendation from your Realtor. I know my lenders. I know they give the best rates to my clients and they have no junk fees involved.
Usually with new construction, the builder will give you some closing costs but then you must use his lender. Thats fine too. However, I will have one of my lenders look it over and if my lender can do better, we go with him. If my lender can't match the closing costs paid by the builder, at least he'll tell us if there are any junk fees involved and usually I can get the builder to throw those out.
I've had 2 clients use internet lenders. They do alot of "bait and switch" and I don't understand how they continue to get away with this. I wouldn't waste my time with them.
I've had 2 clients use internet lenders. They do alot of "bait and switch" and I don't understand how they continue to get away with this. I wouldn't waste my time with them.
I'm hoping that my experience will be less painful. We used an internet lender years ago when we bought our previous house, and then again when we refinanced. We got competitive rates, no junk fees, and everything went without a hitch.
We are tempting fate again this time by going with another "internet lender". This time we chose EverBank, which has been ranked "Best of the Web" by Forbes magazine for the last 5 years. We shopped around at first, trying our credit union and 2 or 3 lenders recommended by our realtor, but they all wanted to charge a 1% origination fee (junk fee!) and their rates were higher.
Who knows, I may regret it, but so far we've done well and have been getting prompt service when we call -- knock on wood.
Good luck newuser. Like I said...had 2 clients and had huge problems both times.
At least with the lenders in town, you can go to their office and just sit until the issues are resolved.
With the internet lenders being in some other state, what recourse do you have?
Vicki
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