In the US, where do you suggest I get a mortgage?
June 19, 2019 12:42 PM Subscribe
I’d like to apply and have used banks before. What are options you have used?
When we bought our home 6 years ago standard practice was to resell mortgages to whomever was buying, and I don't have any reason to believe that the process has changed. It's my impression (based on a sample size of 1) that unless you have a consumer-friendly credit union you don't have a whole lot of control over who will end up owning your mortgage and therefore who you will end up paying, all you can control is the agreement you sign.
With that in mind, we applied it to US Bank, Bank of America (ugh), and a local company affiliated with our realtor. The local company affiliated with our realtor gave us the best rate so we went with them. Shortly thereafter they sold our mortgage to Wells Fargo (ugh) so every month we pay Wells Fargo because we don't really have a choice.
So based on my limited experience I would apply to a few major lenders and a few local lenders and go with whoever gives you the best rate because who knows who you will end up paying, but at least you can lock in the best possible deal.
posted by Tehhund at 12:51 PM on June 19, 2019 [3 favorites]
With that in mind, we applied it to US Bank, Bank of America (ugh), and a local company affiliated with our realtor. The local company affiliated with our realtor gave us the best rate so we went with them. Shortly thereafter they sold our mortgage to Wells Fargo (ugh) so every month we pay Wells Fargo because we don't really have a choice.
So based on my limited experience I would apply to a few major lenders and a few local lenders and go with whoever gives you the best rate because who knows who you will end up paying, but at least you can lock in the best possible deal.
posted by Tehhund at 12:51 PM on June 19, 2019 [3 favorites]
Tehhund's experience mirrors my own except I really, really wish I had gone with the credit union that I bank at rather than using a broker, even if it meas i would be paying more in the long run. Our mortgage has been sold multiple times with each sale putting us at the mercy (and I'm using that word deliberately) of worse and worse companies. Our currant mortgage holder, PHH Mortgage, is singularly awful, hard to deal with and is constantly trying to either fuck us over or confuse us into making a mistake and incurring penalties.
posted by Dr. Twist at 1:02 PM on June 19, 2019 [2 favorites]
posted by Dr. Twist at 1:02 PM on June 19, 2019 [2 favorites]
I had a really bad experience with Bank of America and would warn you against them (as did my realtor, but their rate was really tempting). It seems that local banks are your best bet. That said, my mortgage has been resold, so that's not a guard against that (we haven't really had any problems due to that though).
posted by peacheater at 1:04 PM on June 19, 2019 [1 favorite]
posted by peacheater at 1:04 PM on June 19, 2019 [1 favorite]
If you have an existing relationship with a bank that focuses on customer service, there is a small advantage to working with them, as they can grease the wheels a little if you run into problems with underwriting.
Definitely set up a burner e-mail and phone number if you go with a broker or multiple banks, as otherwise your main points of contact may get buried in solicitations for quite a while after you've already selected a company.
posted by Candleman at 1:07 PM on June 19, 2019 [1 favorite]
Definitely set up a burner e-mail and phone number if you go with a broker or multiple banks, as otherwise your main points of contact may get buried in solicitations for quite a while after you've already selected a company.
posted by Candleman at 1:07 PM on June 19, 2019 [1 favorite]
Absolutely go with a credit union if you can. There are credit unions that are affilliated with workplaces, schools, neighborhoods, and the like - look for one here. We have had two mortgages in our life, one with a CU and our current one with an anonymous faceless lender somewhere in the midwest, and I vastly preferred the CU experience. Credit unions offer more perks (I don't pay for my checking account, no minimum balance required) and better/more personalized customer service.
If you're a first time homebuyer, many CU's will have classes and seminars that will help you figure out the bewildering array of options you're about to face, and often will have incentives for first-timers as well.
posted by pdb at 1:17 PM on June 19, 2019 [2 favorites]
If you're a first time homebuyer, many CU's will have classes and seminars that will help you figure out the bewildering array of options you're about to face, and often will have incentives for first-timers as well.
posted by pdb at 1:17 PM on June 19, 2019 [2 favorites]
We're in the process of buying a house right now and we went with a mortgage broker my realtor has used before and recommends. We're doing a VA loan and he is experienced in those. He got us a great rate. We also got prequalified by our credit union, but they were less responsive and helpful than the mortgage broker so we went with him instead.
posted by apricot at 1:19 PM on June 19, 2019
posted by apricot at 1:19 PM on June 19, 2019
Just echoing others that a credit union, especially local ones, tend not to resell your mortgage. On the surface this is more expensive (in Portland Oregon fwiw) but we’ve had our mortgage for five years now and it has changed hands six times. Twice important payments to our insurance company have not gone through and other details were just fucked up.
We have looked into refinancing solely so that we don’t have to deal with the mortgage shuffle.
posted by furnace.heart at 1:19 PM on June 19, 2019
We have looked into refinancing solely so that we don’t have to deal with the mortgage shuffle.
posted by furnace.heart at 1:19 PM on June 19, 2019
Also a lot of states have special programs for first time home buyers. My husband and I took a class that qualified us to get a $3,500 grant for our closing costs, and other states have similar programs. Just search "[your state] first time home buyer" and see what comes up.
posted by apricot at 1:20 PM on June 19, 2019 [1 favorite]
posted by apricot at 1:20 PM on June 19, 2019 [1 favorite]
I actually work for a mortgage broker (however, I think that based on your location we wouldn't be able to help you directly). If you have questions about the process shoot me a memail.
posted by EmpressCallipygos at 1:31 PM on June 19, 2019
posted by EmpressCallipygos at 1:31 PM on June 19, 2019
My wife and I just used Guaranteed Rate. Yes, that's the dumb name of the company. We had a weird situation where we needed to get approval done ASAP, and my one and only contact there worked over the weekend, and finished it by Sunday afternoon. I still have just one guy as a point person on the thing.
I have no vested interest in them, I just got a recommendation. I was surprised by the level of service they provided. Everything went smoothly, and we even had a semi-complicated mortgage issue on top of needing it so quickly.
posted by SoberHighland at 2:09 PM on June 19, 2019 [1 favorite]
I have no vested interest in them, I just got a recommendation. I was surprised by the level of service they provided. Everything went smoothly, and we even had a semi-complicated mortgage issue on top of needing it so quickly.
posted by SoberHighland at 2:09 PM on June 19, 2019 [1 favorite]
I would probably go with whoever gave me the best rate, but I prefer credit unions when possible. I went with a local broker when I bought my house and it was pretty much immediately sold to Wells Fargo. It wasn't really a hassle though. When I refinanced I went with my credit union, and while they can sell the debt itself, they will always be the one administering the loan so I don't have to worry about dealing with a new entity.
posted by sillysally at 2:30 PM on June 19, 2019
posted by sillysally at 2:30 PM on June 19, 2019
Our credit union is teeny and sold our mortgage immediately. It changed hands twice in five years, a moderate pain. Then we refinanced with aimloan who is a direct lender. Great rates, great service. I have heard that they are not as easy to deal with as a local broker or lender when doing a purchase, but they would be my pick. You can get an instant quote on their site and pick from a range of terms and points/fees tradeoffs.
posted by wnissen at 2:49 PM on June 19, 2019
posted by wnissen at 2:49 PM on June 19, 2019
I applied through a mortgage broker recommended by my realtor, and at the regional bank that I already banked with. It turned out that the bank had a program for 'low income' purchasers that gave them a $4000 grant at closing, where 'low income' was defined as anything below the median income of the county. The bank explained that it's basically a PR write-off for them; they periodically put a bunch of money aside to divvy out in these grants, to show the regulators that they are doing things that benefit the community.
It's worked out well so far--the bank sold the loan, but they still service it, so I still can pay my mortgage as an internal transfer in my online banking, and get customer service at my local branch. (It's my understanding that this is their normal business practice, and was documented in one of the checkboxes in the loan estimate.) They do seem to be somewhat less organized than the mortgage broker, and everything in their process seemed to be done manually, but none of that ultimately affected anything in my closing process. The mortgage broker was on top of everything, and had the super-slick website, but I'm pretty sure my relationship with him would have ended the moment I closed on the house.
If I had to do it again, the only thing I'd probably do differently would be to get a third quote from one of the online vendors mentioned, just so I'd have something to compare/negotiate with--as it was, once the mortgage broker found out about the grant, he realized that he was unlikely to get my business, and didn't want to spend any time putting together an official Loan Estimate. That meant that the only official document I had was the one from the bank. I think I came out alright, but I'll never know if I left something on the table.
posted by yuwtze at 3:48 PM on June 19, 2019
It's worked out well so far--the bank sold the loan, but they still service it, so I still can pay my mortgage as an internal transfer in my online banking, and get customer service at my local branch. (It's my understanding that this is their normal business practice, and was documented in one of the checkboxes in the loan estimate.) They do seem to be somewhat less organized than the mortgage broker, and everything in their process seemed to be done manually, but none of that ultimately affected anything in my closing process. The mortgage broker was on top of everything, and had the super-slick website, but I'm pretty sure my relationship with him would have ended the moment I closed on the house.
If I had to do it again, the only thing I'd probably do differently would be to get a third quote from one of the online vendors mentioned, just so I'd have something to compare/negotiate with--as it was, once the mortgage broker found out about the grant, he realized that he was unlikely to get my business, and didn't want to spend any time putting together an official Loan Estimate. That meant that the only official document I had was the one from the bank. I think I came out alright, but I'll never know if I left something on the table.
posted by yuwtze at 3:48 PM on June 19, 2019
When looking at mortgages, I focus on exactly one number - the APR I can achieve with zero closing costs. Looking at local rates quickly, I see a spread from 3.6% to 4.25%, which is the difference of (roughly) $120/month on a $420K purchase. It's nice to think of dealing with a local credit union that has a nice person to talk to, but that's not worth $120/month to me. Yes, it's mildly annoying to have my mortgage sold repeatedly and/or serviced by another company repeatedly. However, I simply deal with it in exchange for the significant cost savings.
My current property was initially mortgaged by a local credit union, and then subsequently re-mortgaged with a low-cost mortgage broker. I had no difference in service between the two - my money magically disappears every month for both of them. I had some minor pain when my second mortgage was sold, but I'm willing to tolerate that to save a significant amount of money each month. When I move and/or want to remortgage, I'm again just going to shop for the lowest APR possible and go for the sketchiest place possible. It's easier to go into it knowing that your mortgage will be sold, but the terms of your mortgage can't change.
When you shop for mortgage, consider that your initial service helps you exactly once, but the APR difference impacts you indefinitely.
posted by saeculorum at 4:21 PM on June 19, 2019 [4 favorites]
My current property was initially mortgaged by a local credit union, and then subsequently re-mortgaged with a low-cost mortgage broker. I had no difference in service between the two - my money magically disappears every month for both of them. I had some minor pain when my second mortgage was sold, but I'm willing to tolerate that to save a significant amount of money each month. When I move and/or want to remortgage, I'm again just going to shop for the lowest APR possible and go for the sketchiest place possible. It's easier to go into it knowing that your mortgage will be sold, but the terms of your mortgage can't change.
When you shop for mortgage, consider that your initial service helps you exactly once, but the APR difference impacts you indefinitely.
posted by saeculorum at 4:21 PM on June 19, 2019 [4 favorites]
We refinanced with our local credit union, at a good rate viz saeculorum. They then sold that loan on AFAFP, same the original loan, but we got to keep the credit union as our loan servicer, which has been a nice piece of continuity.
posted by ivan ivanych samovar at 4:42 PM on June 19, 2019
posted by ivan ivanych samovar at 4:42 PM on June 19, 2019
Our mortgage has been sold multiple times with each sale putting us at the mercy (and I'm using that word deliberately) of worse and worse companies.
That has been our experience. I think our mortgage has now been sold four times, which makes little sense to me given that the rate is low and there just can't be that much margin in buying and reselling, but there you go.
Our previous mortgage was with a local credit union, which had competitive rates, low fees, and they kept the mortgages rather than reselling. I really regret not doing the same this time.
posted by Dip Flash at 7:25 PM on June 19, 2019
That has been our experience. I think our mortgage has now been sold four times, which makes little sense to me given that the rate is low and there just can't be that much margin in buying and reselling, but there you go.
Our previous mortgage was with a local credit union, which had competitive rates, low fees, and they kept the mortgages rather than reselling. I really regret not doing the same this time.
posted by Dip Flash at 7:25 PM on June 19, 2019
When looking at mortgages, I focus on exactly one number - the APR I can achieve with zero closing costs. Looking at local rates quickly, I see a spread from 3.6% to 4.25%, which is the difference of (roughly) $120/month on a $420K purchase. It's nice to think of dealing with a local credit union that has a nice person to talk to, but that's not worth $120/month to me. Yes, it's mildly annoying to have my mortgage sold repeatedly and/or serviced by another company repeatedly. However, I simply deal with it in exchange for the significant cost savings.
So that was our attitude going into the proceedings, which is why we initially went with Bank of America - so what if their service sucked, the APR they offered was amazing. But what ended up happening was that at the very last minute they found an issue with the house and would only go through with the deal if we complied with doing something that would significantly reduce the future resale value of the house (PM me if you want details). It threw the entire deal into jeopardy, made us look terrible to the sellers (who started to worry that we would flake) and led us to scrambling for another bank at the very last minute. We ended up getting a rate that was higher than we'd have got if we had gone with the other bank in the first place (since interest rates had gone up by then). And until that point we really thought everything was a done deal - the problem is BofA has all the leverage in this situation - you are really insignificant to them, so they don't really care one way or another if the deal goes through. You have a bit (not a lot) of leverage with a local bank since you're not quite so insignificant to them. It's more than an issue of simply not returning calls or being indifferent - having a bank that wants to close the deal as much as you do is important in a mortgage situation.
posted by peacheater at 5:58 AM on June 20, 2019
So that was our attitude going into the proceedings, which is why we initially went with Bank of America - so what if their service sucked, the APR they offered was amazing. But what ended up happening was that at the very last minute they found an issue with the house and would only go through with the deal if we complied with doing something that would significantly reduce the future resale value of the house (PM me if you want details). It threw the entire deal into jeopardy, made us look terrible to the sellers (who started to worry that we would flake) and led us to scrambling for another bank at the very last minute. We ended up getting a rate that was higher than we'd have got if we had gone with the other bank in the first place (since interest rates had gone up by then). And until that point we really thought everything was a done deal - the problem is BofA has all the leverage in this situation - you are really insignificant to them, so they don't really care one way or another if the deal goes through. You have a bit (not a lot) of leverage with a local bank since you're not quite so insignificant to them. It's more than an issue of simply not returning calls or being indifferent - having a bank that wants to close the deal as much as you do is important in a mortgage situation.
posted by peacheater at 5:58 AM on June 20, 2019
Just to chime in, I bought a place this spring and went through a broker and used whatever bank had the best rate at the moment. My mortgage has been sold thrice since. That’s once a month.
You get a grace period if you accidentally pay the old bank but it’s still a big hassle.
posted by OrangeVelour at 6:52 AM on June 20, 2019
You get a grace period if you accidentally pay the old bank but it’s still a big hassle.
posted by OrangeVelour at 6:52 AM on June 20, 2019
« Older How does LTE divide up throughput? | Best way to Amsterdam Schiphol Airport via public... Newer »
This thread is closed to new comments.
posted by maxg94 at 12:46 PM on June 19, 2019