Starting to Shop for Mortgage

brutepunk

New member
hey all,

Following this form a lot and have posted a few,  have always got good info here. As i move into the next step of actually finalizing a mortgage from a bank,
how do i go about shopping banks for mortgage. I have a pre-approval from builder banker, want to try other options , please advice

thanks
 
You can check out Zillow Mortgage for some rates, but be advised it's best to actually call the loan officers and speak about rates than going off the crazy teasers they throw out there.  This will give you an idea of what's out there in the market.  Then contact Soylent Green is People.  From my experience, he's got the best rates, is extremely helpful and your loan will end up being serviced by one of the largest banks in the country.  My current loan is serviced by a smaller bank and I can't tell you how frustrating it can be sometimes (can't cancel payments online, can't make additional payments unless it is one full payment, etc). Best of luck.
 
Check with the big banks - Chase, Wells Fargo, BofA, Union Bank, etc. The smaller banks and online lenders may not be able to meet your expectations in terms of response time and technology. Your rate is generally going to be pretty close - the closing costs will defer from bank to bank.
 
Some thoughts:

1) When is your close of escrow? If it's greater than 60 days, the quotes you will get are great.... for about 30 minutes... then they vanish as rate change hourly sometimes. Wait until the 61st day before closing to start shopping.

2) Consider when your last Mortgage Company Sourced Credit Report was run. If you're in a long escrow, the builders lender ran your credit 4-6 months ago. If your score data is more than 90 days old, see if you can get updated scores. Do not rely on the score data that Credit Karma, Discover, or other "Free Score" sources provide. They can often be 20-30 points off from what the mortgage lender has. Do you need each lender to run your credit to get an accurate rate? Nope. If a lender refuses to assist without a credit report being run (see 4 and 5 below) you have your answer as to if you want to work with that lender.

An article of note on "Free Score" accuracy:

http://www.investopedia.com/articles/personal-finance/103015/are-credit-karma-scores-real-and-accurate.asp

3)  You've got a rate quote. Do you know if you're mandated to have an impound account? More than likely the answer is "Yes". If you do not want an impound account, ask whomever you speak with to structure the quote without impounds.

4) When comparing, an e-mail saying "today, our rate is X at zero points" is not a deliverable or comparable rate quote. E-mail pricing isn't enough data to know precisely what you will end up with. That said, if you can only get rates by e-mail and not in a "Cost Worksheet" or some other form of estimate, avoid working with that funding source. They are hiding something, or won't take the time to assist in a professional manner. Pricing may look good, but if they aren't going to put it in writing, that's not who you want funding your deal.

5) Get Cost Worksheets from the Builder's Lender, your Bank, and one other resource all within a 24 hour period of each other. That's as close to accurate, comparable, and deliverable rate data you can get. Without everyone being on the same and level playing field, I can assure you one of those lenders is lying about their pricing.

6) Ask about other ways to reduce your rate. Some lenders will lower rates with an automatic withdrawal, or diverting your payroll deposits to that bank. Some will reduce rates if you move $$$ to their institution. Ask not... get not... so be sure to ask.

7) If rates improve, can you "float down"? The best answer is "No". That said, lenders will want to retain your business if rates move in your favor. The general rule of rate lock breaking is this - should you lock at 3.50 percent, and rates drop to 3.25 percent, the lender could - in some cases - relock your rate at 3.375%, splitting the difference with you. This price improvement is a one time deal. Also, when a customer hears "Rates are lower" - what is the context for that? A lender might have 3.50% for zero points, and a week later 3.50% is at a .25 lender credit. That's a lower price, but not a lower rate. If you hear "rates are lower" be sure to source this information, or rely on your lender to have this data at hand. I use Mortgage News Daily, and this chart:

http://www.mortgagenewsdaily.com/mortgage_rates/daily.aspx

Note how little rates have moved in over a month! Granted, this is a big data set, and there can be one or two day punches up or down, but all in all the changes have been very slight.

Follow these few guidelines and the most competitive and competent lender will clearly emerge. Note that I didn't say "lowest rate lender". What good is the lowest rate if it's provided by a company that won't do what's listed above? What good is the lowest rate if they primarily process refinances? What good is the lowest rate if they don't know new construction? Is the Lender competitive? Yes. Is the lender  competent? Yes as well. These two criteria tend to be the more important guiderails to bear in mind when starting to shop for a mortgage and committing to a final service provider for one of the most important financial decisions you will make in a lifetime.

My .02c

Soylent Green Is People.

 
I would suggest to talk to Soylent as well and he will recommend what's the best for your given scenario.  He had helped me on 3 applications from the past and every time it was smooth sailing.  By the way I have never seen any loan officer who is willing to sit with you and explain to any question when you sign during closing.  His service is simply exceptional.
 
I would also recommend SGIP. I got pre-quals from a mortgage broker as well as big banks, and overall, my experience with SGIP was the most pleasant.
 
+ on SGIP.

On-time, professional, knowledgeable, usually can provide the lowest rate with great service. Helped me with a purchase then re-fi, now another purchase. Also helped two work colleagues with purchases and both were very happy.
 
Like shopping for anything, the more information/knowledge you have, the better deal you'll find, and the less likely you are to get screwed.

If you've already applied with the builder's preferred lender, find a broker and a big bank and complete applications. You'll receive "Loan Estimates" from each with which you can reasonably compare rates and fees.

The process is easiest, the more simple your situation. If you're not stretching to purchase, you can prove your stable income, and you want a simple 30-year fixed rate loan, comparing your options is easy.
 
A single source cannot provide solutions to every financing circumstance. Each buying scenario is that much different from the next. If my Bank doesn't have a way forward, a referral to another resources capable of getting the job done is at the ready. PM anytime about your specific situation so as to continue forward confidently with your home purchase.

Thanks all for the kind words. It remains a very high honor to serve whenever and wherever possible.

My .02c
 
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