My wife and I are first-time home buyers, looking to buy this year. Interest rates are low, real estate is down the toilet, and we can’t stand renting anymore. But what with the “crisis” going on, we hear lenders aren’t lending, and some of the “big mortgage lenders” are going bellyup. It’s hard to tell what advice to trust, since a lot of it dates to pre-crisis. (man, the jokes are too easy for a comic book fan. I’ll just let it go…)
So what’s a clueless newb to do?
The bank where our checking accounts are is quoting 5%, which seems to be pretty good. But since that’s the first place we looked, it seems too easy to be true. My credit union at work is saying 5.25%, and a few places I’ve looked online seem higher.
Stuff I’ve read online says to stay away from mortgage brokers and sites like lendingtree that shop you around to multiple lenders. They say the brokers offer the mortgages that give them the best cut, and it seems intuitive to me that if the broker is taking a cut, I can do better without a middleman, I just gotta find the lender myself.
I also read online to go straight to big lenders, since other banks will just go through them anyway. Countrywide is supposed to be the biggest lender. Are they still? Is it still a good idea to go with the big guys? They’re offering 4.875, but with 1.125 points.
PenFed , Bank of America, HSBC
For PenFed, the required NMFA membership is $20, but is a small price to pay for an otherwise fine institution.
This thread on Fatwallet may be of interest, never followed up with anything in there, but the thread is green, maybe something to look into:
All the big mortgage lenders typically have their rates on (or a click away from) their home pages. Chase’s is pretty nice in that you can play with assumptions (excellent credit vs so-so, paying 1 point vs. none, etc.) and see what the different rates would be.
Honestly I don’t see what the point is in using a mortgage broker, when you can check all the rates online everywhere. What does the mortgage broker do for you that you can’t do yourself? Plus there is that concern that they’ll steer you to whatever lender gives them the best fees.
We just refinanced with Wells-Fargo and though we’ve had loans with them before (with easy refinances) this refi was a much bigger pain in the neck. I think this was largely due to the current environment - we had to document EVERYTHING (which isn’t generally a bad thing), including getting a letter from the homeowners’ association saying how the roads are maintained. And three go-rounds before they waived the need to get contact information from our CPA to document self-employment income (hard to do, as we don’t have either a CPA or self-employment income :rolleyes:). Oh - and they have tightened their rules for whether you can also have a home equity line of credit - the new mortgage amount + the HELOC limit were less than 80% of the value, but they insisted the HELOC limit be lowered to 70% of the house value.
We actually have found that our credit union’s mortgage rates aren’t any better (and are usually slightly worse) than the ones we can get out in the marketplace.
IIRC, bankrate.com has a tool to pull in various rates for comparison - they were similar to what we saw if we went directly to individual lenders’ sites.
Rates can vary from day to day - sometimes by a full quarter of a point (I wish I’d waited 5 days to lock into the refi rate, we’d have saved 3/8 of a point. Oh well).
Mortgage brokers can sometimes get you better deals…the banks pay them for them to take care of the paperwork, basically. And they may know about short terms specials and which lender is best for your circumstance–for instance, in Chicago some lenders charge an extra .25 or .50 point for high rise condo loans. Anyway, my broker (skyline capital group) beat both my bank and everything I found online and another mortgage broker by .5 points and there were no surprise fees at closing, so I feel pretty positive about them.
Credit Unions are modestly liquid, right now.