Friday, March 31, 2006

Finding a mortgage

I recently decided to purchase a house and, upon acceptence of my bid, went to look for a mortgage. This being new to me, I asked a bunch of people what they did. Some had a guy they knew (some type of mortgage broker I assume). Some went with their bank or credit union to make it easy or for other added benefits. With how much money you can lose or save from this whole process I decided to try a bunch of options and see what I could come up with. Here's my review of the following options:

Local credit union/banks:
I started with the ones I knew to have a basic knowledge of the current rates and as a way of what rate to beat. I figured I would rather go with my bank unless the rate is a bit better.

I was told about about this from RS and gave it a whirl. It's pretty cool. After you fill things out, you just wait while bids come in and then the loan officers give you a call (or you can call them if you prefer). Overall I was pretty happy with it and in the end found OptAmerica to give a great rate and good advice.

I considered this but was wary of them having my credit card and charging me before I could examine a good faith estimate. I thus opted not to try this out.

CNN Money mortgage finder:
This seemed to have a great facility for comparing a bunch of banks/brokers. I wasn't sure what the Fees in APR would be for but sorting by APR seemed to work best (instead of by rate). The only other confusing thing here is the lender you contact doesn't neccessarily give you the rate posted (even tho my credit rating is excellent). In the end, this is how I found American Enterprise Bank which I went with (OptAmerica had just as great an offer but came in just a few minutes after).

Got this tip to look into from a friend, but I don't meet the qualifications. Would of been something nice to know when I first got a job though.

I feel like I ended with a good decision. OptAmerica looked over the good faith estimate of American Enterprise after which I was given some final things to watch for, but overall seems everything is in order. I learned to always ask for a good faith estimate and check for the infamous loan origination fee (points buying system).

I'd be interested in hearing how others went about finding their mortgages and what method they found to work best.


Anonymous sixpack said...

My company has discounts with the banks since we relocate a lot of employees. That's how I'm going to get my loan.

3/31/2006 10:26 PM  
Anonymous Phil said...

Most people get pre-approved for a mortgage before making an offer. I'm suprised your bid was accepted.

I got my first mortgage in 2004. My real estate agent was recommended by a friend. She gave us the names of three mortgage bankers or brokers to contact. Avoid a broker: it will only cost you more for their services. The market is pretty competitive, so a good mortgage banker should give you a competitive rate. We met with 2 of the 3 recommended and decided on one.

Also, find out if your banker is going to hold the mortgage or sell it on the secondary market. After we got our mortgage, our banker sold it to what I assume is a high-risk mortgage holding company (i.e., new mortgages on the lower end of "good" credit ratings). This company then sold it to a major mortgage holder after a couple of months. So, after the money changes hands, it's unlikely that you'll every talk to your broker again. (Although, we did have a small problem where our broker gave the company that received our HELOC half of our old address and half of our new address)

3/31/2006 10:59 PM  
Blogger RS said...

I am not 100% sure, but I think that DD did get a pre-approval first, from our local credit union. I will let him answer for sure though.

When I got my first house, I didn't know much at all about the process and ended up using a broker. We were told that he was paid by the banks...we didn't pay anything. What did I miss? I understand that he may have steered up towards a bank with a higher rate, but we were doing our homework on the rates as well, so we knew the one that we got was pretty good.

Our loan on our latest house got sold from Bank of NY about a week after we got it. Not a big deal I guess...just a different address to send my check to.

3/31/2006 11:37 PM  
Anonymous Anonymous said...

I'd be curious about the state of your credit report after this little adventure. I would bet that every lending institution that looked at you through Lending Tree pinged your credit report. I don't know about the rest. But this is just what I have heard around the water cooler. It could be complete rubbish.

4/01/2006 7:04 AM  
Blogger RS said...

I am not 100% positive, but I thought that the credit reporting agencies had some smarts and than any inquiries for a mortgage, car loan, etc. within a certain time period all counted as 1. This allows you to "shop around" a little and not worry about it killing your credit scrore.

4/01/2006 5:33 PM  
Blogger DD said...

I did get a pre-approval before (sort of). Hadn't come in the mail yet but I was able to call the credit union up to get it faxed to me the day of the bid. We (the seller & buyer) knew each other in this case so they knew I would have no problem with approval.

The credit rating system has a 14 day or so window in which all the pings on your score will be perceived as just 1 check. My rating might go up even higher now as I pay my mortgage on time.

My company also has discounts with banks, but others told me they were able to find better going through a broker.

My mortgage will be getting sold. It'll be interesting to see how everything continues to play out. Maybe I can post the good/bad of this in the future.

4/03/2006 2:18 PM  
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6/26/2006 7:26 AM  
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Blogger marisa said...

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9/04/2010 4:01 AM  
Blogger Maizah said...

Many peoples are need to highly 100% good financing. SO Mortgage bankers are provide some discount plan here. So its really better for all loan buyers.

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11/13/2010 3:41 AM  
Blogger Justin said...

I'm about to move in to Pittsburgh. Mortgage lenders there thankfully were able to give us the best rate at the time of our application.

What I can give as an advice is to shop around for the best mortgage deals. Also, make sure that you fully understand the underwriting. And, get the best mortgage lenders. Pittsburgh and other cities definitely have them.

11/18/2010 11:33 PM  
Blogger Harry said...

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11/30/2010 4:49 AM  
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4/05/2011 6:43 AM  
Anonymous Chris from said...

The best and cheaper deals usually are at a bank. In case you don't qualify for a bank's strict guidelines, a mortgage broker is your next best option. But even if you'd qualify for a bank loan, a broker may also have competitive rates/fees. It would be best to shop around and compare rates and terms from various lenders to get the best financing deal.

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