Advantages of going with a large bank over a local lender?

[memo]

Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

 

[ZOOYUKA]

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

Go with the lower closing costs. The local person is probably just a mortgage broker for a large mortgage company. Your mortgage will more than likely be sold to another mortgage company immediately after closing.

 

[krunchykrome]

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

 

[darkxshade]

or you can go even more local and borrow from a loan shark.

 

[memo]

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

 

[sjwaste]

Originally posted by: ZOOYUKA

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

Go with the lower closing costs. The local person is probably just a mortgage broker for a large mortgage company. Your mortgage will more than likely be sold to another mortgage company immediately after closing.

Is there a good way to estimate closing costs before getting a contract? I don't think they'll do GFE's until then, right?

 

[ZOOYUKA]

Originally posted by: sjwaste

Originally posted by: ZOOYUKA

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

Go with the lower closing costs. The local person is probably just a mortgage broker for a large mortgage company. Your mortgage will more than likely be sold to another mortgage company immediately after closing.

Is there a good way to estimate closing costs before getting a contract? I don't think they'll do GFE's until then, right?

The main difference would be the loan origination fee. That is the brokers % commission. A small % goes along way on a few hundred thousand dollar loan, so go with the cheaper one.

 

[krunchykrome]

Originally posted by: memo

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

Think about it like this. Homes are being foreclosed left and right. Lenders make their money off of the repayment of the loan. Lenders know that there will be a percentage of borrowers unable to meet their obligations, and these expectations are already reflected in their financial position. But when more loans than expected are unable to be collected (take a look at todays market), a loss hits their books. A larger lender is in a better position to withstand these financial setbacks/losses than a smaller lender is.

 

[rudder]

Originally posted by: krunchykrome

Originally posted by: memo

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

Think about it like this. Homes are being foreclosed left and right. Lenders make their money off of the repayment of the loan. Lenders know that there will be a percentage of borrowers unable to meet their obligations, and these expectations are already reflected in their financial position. But when more loans than expected are unable to be collected (take a look at todays market), a loss hits their books. A larger lender is in a better position to withstand these financial setbacks/losses than a smaller lender is.

All the more reason to go with the small guy. I am buying a $728,000 home although I am only approved for a $223,000 home. My hope is that the company I am getting the mortgage through will fold and they forget about my loan.

 

[Beattie]

It really doesn't matter. The loan is most likely just going to get sold off to some other bank anyway. Just do whatever deal is better for you. And you always want 0 points and 0 origination fees.

 

[Beattie]

Originally posted by: krunchykrome

Originally posted by: memo

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

Think about it like this. Homes are being foreclosed left and right. Lenders make their money off of the repayment of the loan. Lenders know that there will be a percentage of borrowers unable to meet their obligations, and these expectations are already reflected in their financial position. But when more loans than expected are unable to be collected (take a look at todays market), a loss hits their books. A larger lender is in a better position to withstand these financial setbacks/losses than a smaller lender is.

And this affects you, the borrower, how?

 

[Capt Caveman]

Originally posted by: rudder

Originally posted by: krunchykrome

Originally posted by: memo

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

Think about it like this. Homes are being foreclosed left and right. Lenders make their money off of the repayment of the loan. Lenders know that there will be a percentage of borrowers unable to meet their obligations, and these expectations are already reflected in their financial position. But when more loans than expected are unable to be collected (take a look at todays market), a loss hits their books. A larger lender is in a better position to withstand these financial setbacks/losses than a smaller lender is.

All the more reason to go with the small guy. I am buying a $728,000 home although I am only approved for a $223,000 home. My hope is that the company I am getting the mortgage through will fold and they forget about my loan.

You loan would be an asset that can be sold. It's not going to be forgotten. Not like you could afford such a home.

 

[PingSpike]

Originally posted by: Beattie

Originally posted by: krunchykrome

Originally posted by: memo

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

Think about it like this. Homes are being foreclosed left and right. Lenders make their money off of the repayment of the loan. Lenders know that there will be a percentage of borrowers unable to meet their obligations, and these expectations are already reflected in their financial position. But when more loans than expected are unable to be collected (take a look at todays market), a loss hits their books. A larger lender is in a better position to withstand these financial setbacks/losses than a smaller lender is.

And this affects you, the borrower, how?

It doesn't as far as I can see. Especially since the larger lenders sell your loan even when they are doing well.

I didn't see any reason to go with a larger lender. I went with a local bank that I get my checking from and that has no presence outside my state. The interest rate was virtually the same, the closing costs were cheaper, they let me lock the rate for free and if it went down they'd give me that rate...and they have never sold any of their loans and have no plans to ever do so. And if I ever have a problem, I can drive down to the bank and complain to an actual person that actually holds my actual loan. If worse came to worse, they would actually have the power to negotiate with me so I could keep my house.

 

[krunchykrome]

Originally posted by: PingSpike

Originally posted by: Beattie

Originally posted by: krunchykrome

Originally posted by: memo

Originally posted by: krunchykrome

Originally posted by: memo
Are there any tangible benefits of going with a larger bank like Wells Fargo over a local lender? Their rates are the same and the local lenders closing costs are a little bit lower but negligible.

The larger lenders have more muscle to withstand this horrible market.

Can you expand on that a little bit? Do you mean they aren't going to go bankrupt and have your mortgage float out in no mans land?

Think about it like this. Homes are being foreclosed left and right. Lenders make their money off of the repayment of the loan. Lenders know that there will be a percentage of borrowers unable to meet their obligations, and these expectations are already reflected in their financial position. But when more loans than expected are unable to be collected (take a look at todays market), a loss hits their books. A larger lender is in a better position to withstand these financial setbacks/losses than a smaller lender is.

And this affects you, the borrower, how?

It doesn't as far as I can see. Especially since the larger lenders sell your loan even when they are doing well.

I didn't see any reason to go with a larger lender. I went with a local bank that I get my checking from and that has no presence outside my state. The interest rate was virtually the same, the closing costs were cheaper, they let me lock the rate for free and if it went down they'd give me that rate...and they have never sold any of their loans and have no plans to ever do so. And if I ever have a problem, I can drive down to the bank and complain to an actual person that actually holds my actual loan. If worse came to worse, they would actually have the power to negotiate with me so I could keep my house.

you're right, the loan will just be sold as an asset to another company. My example is referring to the possibility that the OP gets preapproved for a loan, and in the process of searching/buying a new home, the company goes bankrupt. It's just an additional hassle that has a greater possibility that you face if you go with a smaller lender. If you already have a mortgage with a lender and they go bankrupt, the only thing you have to worry about is to who to make the check out to and where to send it.