Mortgage rates -- how to find cheapest?
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Vic
Elite Member
- Jun 12, 2001
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There is no "cheapest." Most lenders are all using the same source of funds, either from FNMA or FHLMC or both, and rates and fees from each lender on any given day usually vary by less than the amount by which rates change every day. There are exceptions to this, of course, particularly for niche programs like certain balloons, ARMs, and subprime credit and alternative documentation programs, and some lenders are a little more expensive but in that case you often get what you pay for (meaning that many of the discount lenders out there *cough* Ditech *cough* provide extemely inferior service, even if you qualify you'll be lucky to get the loan).
Also, do not call around to mortgage lenders and ask, "What's your rate?" All you're doing is showing that you know nothing of how mortgages work. Why? Because (1) rates change - not everyday - but every minute, so if you're not approved and locking in at that very moment, whatever rate they quote you is meaningless, and (2) rate pricing on any given credit grade is subject to a multitude of factors like term, loan amount, loan purpose, whether or not you wish to buy down points, etc. If the loan officer that you initially speak to is not aware of those factors and is just quoting you "a rate," then once again that quote will be meaningless.
Lendingtree.com, btw, is an absolute joke in the mortgage industry. All they are is a lead source. If you want your name and personal info to be spammed into a hundred marketing databases, guaranteeing you to get telemarketing calls for life, then by all means apply there.
My best advice is to find a good honest loan officer that you can trust to provide excellent competitive pricing and service, and stick with them.
edited: spelling
Also, do not call around to mortgage lenders and ask, "What's your rate?" All you're doing is showing that you know nothing of how mortgages work. Why? Because (1) rates change - not everyday - but every minute, so if you're not approved and locking in at that very moment, whatever rate they quote you is meaningless, and (2) rate pricing on any given credit grade is subject to a multitude of factors like term, loan amount, loan purpose, whether or not you wish to buy down points, etc. If the loan officer that you initially speak to is not aware of those factors and is just quoting you "a rate," then once again that quote will be meaningless.
Lendingtree.com, btw, is an absolute joke in the mortgage industry. All they are is a lead source. If you want your name and personal info to be spammed into a hundred marketing databases, guaranteeing you to get telemarketing calls for life, then by all means apply there.
My best advice is to find a good honest loan officer that you can trust to provide excellent competitive pricing and service, and stick with them.
edited: spelling
Look for Mortgage Investor companies. They sell multiple products from a wide variety of lenders. With those, you usually do all the paperwork and close with the investor company. Then, at the end of the month, they sell it in bulk to another lender which will service your loan. Thus, you end up with a California company taking your house payments for property in Georgia. If you deal solely with a bank, then you are probably being limited on the number of program they can offer. They just probably don't have the resources to offer programs from Countrywide, WaMu, etc...
If you do go this route, try and get an LO (Loan Officer) that is new or just starting. They are more likely to give you a better rate because they just want to close anything they can. They aren't going to stiff you with a bunch of overages or made up bull-crap. They aren't going to require as much points or other things like that. They are going to take the absolute minimum that they can from you to close the loan. If you are with an established or big name LO, then they have nothing to loose. They may be doing a few million a month in closing as it is. If they can't stick you for a lot of points, needless extras, and so forth, then they will move on. Why should they bother?
Its the beginner LOs that HAVE to close whatever they can. They are going to cut you the best they can so they have money at the end of the month. Speak with someone and pay attention. Try and pick up any names or assistant LO names you can. Heck, call them back and talk to another LO. Keep calling until you find a rate you like. Don't be afraid to compare rates with multiple guys. If you go to an investor type place that I described, don't be afraid to talk to one guy, and then call another when you get home. Finding the right guy can be a big part of the process.
What state are you in?
If you do go this route, try and get an LO (Loan Officer) that is new or just starting. They are more likely to give you a better rate because they just want to close anything they can. They aren't going to stiff you with a bunch of overages or made up bull-crap. They aren't going to require as much points or other things like that. They are going to take the absolute minimum that they can from you to close the loan. If you are with an established or big name LO, then they have nothing to loose. They may be doing a few million a month in closing as it is. If they can't stick you for a lot of points, needless extras, and so forth, then they will move on. Why should they bother?
Its the beginner LOs that HAVE to close whatever they can. They are going to cut you the best they can so they have money at the end of the month. Speak with someone and pay attention. Try and pick up any names or assistant LO names you can. Heck, call them back and talk to another LO. Keep calling until you find a rate you like. Don't be afraid to compare rates with multiple guys. If you go to an investor type place that I described, don't be afraid to talk to one guy, and then call another when you get home. Finding the right guy can be a big part of the process.
What state are you in?
Vic
Elite Member
- Jun 12, 2001
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royaldank, I won't dispute the accuracy of your post (although it does confirm a long-held suspicion that I have had about mortgage shoppers), but I will warn that greenie incompetent loan officers just looking to scrape up any sale they can are bound to make a lot of mistakes. They're the ones that come to my office crying about some file they can't close and some customer who's pissed as hell at them about how they screwed their file up... and then I look at the file and they're not even making enough on it to get a commission check... well, you get what you pay for.
I'll agree with that. Maybe I should qualify with a good LO that knows what they are doing. That might go along with the company they work for. Not mentioning names, but I used to work at one of these places until recently leaving. I was in computer programming, so I'm not one swindling the customers. I was just amazed when I really learned how mortgage sales work. It's crazy to see what some people make by screwing over the customer. I'm talking about $3000 overages on a first time homebuyer getting a gov't helped loan of $75,000. I mean, I couldn't personally do that to someone face to face.
I guess the main point is shop around. Unless you know someone working at a mortgage, don't be afraid to shop around a lot. You'll find someone that you can talk to and will offer you a good rate. Hopefully you can make a decision from talking to the guy how well he'll work out. Let them know you are looking around for a decent. If they start jerking your chain or come out of the gates with something absurd, let them know and hang up.
I guess better advice is look at places that offer lots of programs. Don't limit yourself to whatever bank you've been using for the last couple years. Make sure you have a large choice of programs that might fit your criterea. Investment mortgage brokers are generally able to offer a lot more and might be able to find something that works better for you. Something that might get the gov't to help paying some bills or private products that aren't available to just anyone, only bulk buyers.
StageLeft
No Lifer
- Sep 29, 2000
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Actually the timing of this thread is interesting. We are "pre-approved" for a mortgage. We put in an offer on Monday and are closing in late June IF we can get final approval. Normally that's not a problem but our circumstances are irregular given that Mrsskoorb has no US history credit wise. So we have two officers. One has managed to pre-approve on my income/history and some deal where he can boost my income by 25% for a "family income" deal. He is 90% sure it will go through but said he can't guarantee until he sends to underwriting.
Another guy said he can use mrsskoorb's canadian credit history and he is now looking at things. I prefer the first guy and will use the second as a backup.
Yesterday the first guy said I could lock in at 6% for 60 days and I told him too but today he said let's wait until friday because if we do that then i can lock in 5.875 for 45 days - and he said the rates won't go above 6% as a worse case by friday. Let's hope not
That's over 30 years with 100% down. His cut of the check is 1%.
Why am I saying this? To backup what vic said about inexperienced loan officers. The guy who can use mrsskoorb's canadian credit is younger (maybe 30 vs. 45-50 of the other guy), which doesn't turn me off BUT somebody mrsskoorb is working with at the hospital is using a guy who happens to work in the same room as the younger guy and she told us to not go with this company because the person she is dealing with (about 25) has dicked around so long that she's had to go to the manager and they are set to close in 3 days from now and still don't have everything these people say they need. I get from this that experience is worth something. If you have a very simple straight up loan (credit history, long term job with a set salary, etc.) then I don't really see how an inexperienced officer could fungle it too much but if you have a peculiar situation or anything out of the ordinary (most people will have at least to make it a little more complex) a good officer is worth it because last thing you need is to be set to move into a house in two weeks and the find out it's screwed. Then you're probably out somewhere to live, lost out on the house you'd been hoping on, etc.
Oh yeah and BTW both these guys happened to quote me at pretty much the same rates, although the second was going to shave off a significant chunk on the monthly payment (but required a good bit higher closing cost - the difference was PMI. Damnable PMI :|).
Another guy said he can use mrsskoorb's canadian credit history and he is now looking at things. I prefer the first guy and will use the second as a backup.
Yesterday the first guy said I could lock in at 6% for 60 days and I told him too but today he said let's wait until friday because if we do that then i can lock in 5.875 for 45 days - and he said the rates won't go above 6% as a worse case by friday. Let's hope not
That's over 30 years with 100% down. His cut of the check is 1%.Why am I saying this? To backup what vic said about inexperienced loan officers. The guy who can use mrsskoorb's canadian credit is younger (maybe 30 vs. 45-50 of the other guy), which doesn't turn me off BUT somebody mrsskoorb is working with at the hospital is using a guy who happens to work in the same room as the younger guy and she told us to not go with this company because the person she is dealing with (about 25) has dicked around so long that she's had to go to the manager and they are set to close in 3 days from now and still don't have everything these people say they need. I get from this that experience is worth something. If you have a very simple straight up loan (credit history, long term job with a set salary, etc.) then I don't really see how an inexperienced officer could fungle it too much but if you have a peculiar situation or anything out of the ordinary (most people will have at least to make it a little more complex) a good officer is worth it because last thing you need is to be set to move into a house in two weeks and the find out it's screwed. Then you're probably out somewhere to live, lost out on the house you'd been hoping on, etc.
Oh yeah and BTW both these guys happened to quote me at pretty much the same rates, although the second was going to shave off a significant chunk on the monthly payment (but required a good bit higher closing cost - the difference was PMI. Damnable PMI :|).
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