Who is best to get a home mortgage through?

Question

Would it be best to go through banks, credit unions or other lenders that mortgage brokers might suggest? What are competible and reasonable mortgage rates? Is 6.25% legit for an first offer or should I definitely keep looking?

Answer 1

As of today's rates, depending on where you're buying and how much you're financing, 6.25% is dead-on for the 30 year fixed mortgages today. Assuming no more than 1% origination fee and other costs being reasonable.

I never discourage my clients from getting other offers. You should always talk to a couple places, I'd recommend 1-2 brokers, 1-2 banks, and try the credit union too. In my experience, credit unions have decent rates and low costs. Banks have higher rates and average costs. Brokers will come in on both sides, depending on who you find. Theoretically, a broker should be able to get you the best deal. In practice, not always the case.

But it doesn't sound at all like you're getting screwed or taken advantage of, again assuming that's 6.25% 30 year fixed with reasonable costs.

Answer 2

A couple additional points to keep in mind as you consider the information above:

Sometimes a broker will get a better payment, sometimes a banker. Shop all types of lenders and see which comes out best for you.

While everyone has access to the same programs, there is something called a yield spread that nobody is going to tell you about. Basically, the yield spread is how much the loan originator makes on the back end when your loan is closed/sold. The higher the rate the originator can get you to take, the higher the yield spread and the more money the originator pockets. It's basically a game - the originator needs to guess what's the highest rate you'll accept so as to make the most money. Letting everyone know you are actively comparing offers will help you get the lowest rate.

And another factor in determining your rate is how much money you are putting into the transaction. If you are talking 100% financing, the rate you are quoted is actually decent. But remember, it's not all about the rate. There are fees, too. A low rate with high fees can be worse than a higher rate with no fees. You need to see the complete deal to make your decision.

Best of luck!

Answer 3

6.125 - 6.25% with 0% origination fee and 0% discount points is good.

Check with the credit unions....since they have low overhead costs, they are usually very competitive when it comes to rates and fees.

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REPLY TO TOGSHIYOKUNI'S COMMENTS:

I was one of the guys that threw up a rate, and I take offense to what you just wrote. If you look at the answers I've written over time, then you'll know I'm not a B.S.'er.

6.25% w/ 0 pts & 0 origination is not high - even for those with excellent credit. The rates on a 30 yr fixed w/ 0pts, 0 origination on a 1-unit primary residence, with 5% down, and with good credit - 6.125 - 6.250% is the range.

Did I make some assumptions about the borrower? Yes. I assumed he was quoted the 6.25% by a loan officer. He surely didn't just pull it out of thin air. I assumed the LO asked him about the property type, his down payment, his credit, etc. Of course, if the parameters change, eg, bad credit, then the rate will be higher.

You then go on to write that 3/27 ARM may get the borrower into the 5s. If it does, then BARELY - more like 5.875% - 6.000%. Are you familiar with the term inverted yield curve?? Also, why take a 3 yr ARM knowing you'll have to refi it in 3 yrs when for another 0.125% you could have a 30 yr fixed. With such a small gap, even if the borrowers plans are to sell in 3 years, I'd still advise against it - as plans often do change.

Answer 4

All banks just about offer the same products and loan programs with the different qualifications in each of their programs.

Your interest rate is based on your credit score and how well you have paid your consumer debt over time.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home.

In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

I this has been of some use to you, good luck

"FIGHT ON"

Answer 5

My personal preference is with the banks. If you pick the larger and more stable ones, then you will generally be looked after.

Mortgage Brokers can be good, but be careful and make sure you find out what their fees are and how they are being paid.

If you are new to mortgages, make sure you are aware that loads of banks and lenders make mistakes in their ongoing interest calculations. We all spend so much time looking for the best rate up front, and then just forget about our mortgages once we sign up.

You can use a spreadsheet to track your mortgage and check your statements, or download one of the better mortgagr software packages out there. It could save you thousands.

Answer 6

First and foremost, do not ever trust anyone who will just throw a rate at you. They're the type of people that will get you in their camp, get to step 9 of 10, and then surprise you with a higher rate. What you qualify for depends on your total situation, not just your credit score. And what I mean by total situation is credit score, credit depth, debt ratio, reserves, loan-to-value, everything. An accurate rate cannot be found without this information. For someone who has top-notch credit and has all other factors in line with what the bank wants, a 6.25% rate may be high. All things being equal, it will depend on the product you want. A 30-fix may get you 6.25%, but a 3/27 ARM may get you down in the 5s. It all depends.

Answer 7

go to lending tree.com and lower my bills.com they match u up to 5 different lenders best for you. banks are not that good. mortgage brokers are better because they are connested to over 100 banks to find the best one for u. then compare which one u like better. and always ask for a good faith estimate, they will send you the monthly payments so u see how much it is. some lenders say one thing, but switch ur terms when u sign, and u signed up for something more expensive. some lenders already got caught doing that. but if u have the good faith estimate, and they switch ur terms, u can sue them. they even do it when u try to refinance. it was on the news a few days ago. make sure they are with the better business buruea
and it depends on ur credit score, and ur debt to income ratio and ur job for a interest rate. if u have low debt, a high credit score, you can get 6%. if u buy points you can get 5%.
if u have a high credit score, you dont need to state ur income.

Answer 8

Depending on your credit score and loan term, you could probably do better. For more information from someone in our loan officer network , fill out the free form at

www.totaldebtsolutionsllc.com

Answer 9

Usually credit unions are the best.