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First time homebuyers ready to start the Loan process. But should we use a loan office (broker) or should we just go directly to a bank to apply for a loan?The loan officer is charging me $350 for the pre-approval application and 1 point after the whole process goes thru. Can a bank offer me the same interest rates and same programs?? Please advice me before I continue to make a big mistake that can cause me a bitter experience! Thanks
By law, you are supposed to receive a good faith estimate from each lender to guide you in determining the better offer.
Also, it depends on your particular circumstances, credit score, employment, cash reserves, etc.
A bank offers a limited number of loan programs.
A mortgage broker has wholesale agreements with many banks and may offers an array of loan programs.
The 1% loan origination is customary on most mortgage loans unless you accept a higher interest rate which actually means that you pay more money in interest over the length of the loan.
The $350 pre-approval fee might be a negotiation item with the broker.
However, chances are that the bank will add some additional charges to the 1% origination as well.
Good luck!
Last edited by learningCA; 02-03-2010 at 12:06 AM..
Whats more important than the business model is the Loan Officer as they will make or break your experience. Get a referral from a trusted source( friend, relative, coworker, financial advisor) to someone they have worked with in the past and ahd a good experience with.
Whats more important than the business model is the Loan Officer as they will make or break your experience. Get a referral from a trusted source( friend, relative, coworker, financial advisor) to someone they have worked with in the past and ahd a good experience with.
However, the loan officer cannot be better than the company he/she works for and the processor who services his loans, sir.
Check your local credit union. My credit union offers a no CU-related costs (ie. you still pay appraisal, state doc stamp tax and such but don't pay the usual borrower 'junk fees') primary residence loan at a better rate than many high fee lenders.
However, the loan officer cannot be better than the company he/she works for and the processor who services his loans, sir.
That depends on the quality of the LO. I do not pass the file to my processor and forget it but view the quality of their work as an extension of me and my reputation because it is. I am responsible for their actions or lack there of and because of this review all files with my processor every 48 hours to make sure things are moving along smoothly and as expected.
In addition working for a broker rather than a bank I have options as to what lender to place a loan file with. In my initial conversation with a prospective client I learn what their prioritites are: Speed of closing on a purchase to meet a specific date, lowest possible rate on a refinance even if it means taking an extra week to close, etc. I would rather earn a few hundred less dollars on a loan and have a client with a great experience and pass on a referral or 2 than send a file to a lender that can not meet the clients goals.
These are the reasons a LO can make or break a clients experience with the loan process.
Check your local credit union. My credit union offers a no CU-related costs (ie. you still pay appraisal, state doc stamp tax and such but don't pay the usual borrower 'junk fees') primary residence loan at a better rate than many high fee lenders.
Any bank can offer a loan with no bank fees. They simply increase the interest rate. At the end of the day, the consumer pays much more in interest than if they just paid the fees up front.
My credit union's terms are consistently within 0.1% higher to 0.2% lower than current national average APR for a no points/no origination mortgage loan. Their no fees period HELOC rate is also currently 3.25%, which is significantly lower than current average rate for the industry.
I am sure it is, but you are looking at retail rates. When you work with a broker you get access to wholesale rates which will be consistantly lower than the local credit union or bank.
If you can find out, what is their rate today with no points for a 30 year fixed?
Check your local credit union. My credit union offers a no CU-related costs (ie. you still pay appraisal, state doc stamp tax and such but don't pay the usual borrower 'junk fees') primary residence loan at a better rate than many high fee lenders.
I agree about the HELOC. Check the CU on those.
For a 1st mortgage any lender can do no costs including all the way to you don't pay anything...no appraisal, no title, no county fees, etc. Of coarse your rate will be a bit higher with the low or no cost options.
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Thanks 
