06-28-2012 01:36 AM
I'm planning on getting a mortgage very soon and am not sure on the pros and cons between going with a Bank, Credit Union or Mortgage Broker. I was thinking of trying Bank Of America (my bank) but recently heard about Lockheed Credit Union as an alternative choice.
Do any of you have a preference on where to get a loan from?
Does having nearly 800 FICO and 20-30% downpayment gain any advantages from one type of lender over the others?
Do Broker's get paid by commission, if so, do I pay the commision or the lender?
Many thanks for your thoughts!
06-28-2012 07:05 AM
I had 780 fico, tried the bank and credit union but the broker still came up with the best deal--lowest interest, best terms, even payment assistance (discounted closing costs, for example). You don't pay the broker at all, the commission comes from the lender usually. The broker has a lot of info that buyers are not privy to, or would take too much time to research on your own. Ask your RE agent if he/she works with a broker. I think my broker was the superstar in my whole homebuying process.
06-28-2012 02:11 PM
Ditto about the broker. I shopped around between a couple major banks and a relative recommended a broker - the broker was able to help me get the other banks to lower their rates and offer concessions - I ultimately went with the broker because I felt she was honest and up front with me the whole time while the mortgage "specialists" from the other banks kept trying to hard-sell me a loan and get me to lock/sign, they also kept telling me only they can offer the best rate and everyone else must be a liar - i hate dealing with people like that.
06-28-2012 03:01 PM - edited 06-28-2012 05:52 PM
I went for direct lenders. I'm paranoid. I don't like using mortage brokers because they send your information all over the places and you have no control over that. If you don't share the same concern, I would say a broker can always give you a competitive quote. Having said that, it still doesn't hurt to get pre-approved by a big bank/lender. I remeber on this one house, the listing agent did not like the fact that my direct lender was not well-known but said at least it's a direct lender not a mortgage broker. It was a bidding situation so they wanted to know that I can actually get a loan not just think I can get a loan (i.e., bank X said you can get a loan from them > a broker said you can get a loan from bank X). If you want to purchase a REO say from BofA, most likely they would want you to get pre-qualified by BofA. Shop around and compare the GFEs item-by-item for items that you can actually negotiate.
06-28-2012 04:57 PM - edited 06-28-2012 04:58 PM
We recently finished a loan with a big bank (Chase) and the loan process was a beurocratic nightmare. It seems that most of these banks laid off a lot of people when the market crashed and are hesitant to hire again even though they're incredibly understaffed now.
I really think we should have gone with the broker suggested by our real estate agent now, since they'd already vetted him and knew that he'd be able to close quickly (which is in both of your favors).
After our experience with this last loan, I think our next purchase will definitley be with a small credit union or a broker.
06-28-2012 06:39 PM
I work for a bank and I can definitely say most of the Big and mid size banks are extremely understaffed. They just refuse to hire more people but senior management will continue to get the big paychecks. Succccccks.
06-28-2012 09:41 PM
Thanks everyone for the great info!
Looks like I'll check into a Broker and the Credit Union. I'm just worried about my credit score taking a hit from multiple lender credit checks.
Also, good to know Brokers don't get paid by me and now I must find a trustworthy, hard-working broker to get me the best deal and interest rate to compare with a Credit Union.
06-28-2012 09:43 PM
I wouldn't worry about the credit checks hurting your credit score. I actually went to about 5-6 different lenders and had my credit checked around a total of 11-12 times in the 2-3 months we were loan shopping and my credit score wasn't negatively affected. The internet may have better information about this, but there's something build into the credit scoring system to account for rate shopping.
06-28-2012 11:03 PM
@ kellybee & casetronic
Would you mind sharing the name of your broker please?
I'm pre-approved thru B of A. When I mentioned to the guy that I heard one can save a little money by making bi-weekly mortgage payments, he told me he thinks B of A charges $5 each time to pay bi-weekly...Recockulous!
06-29-2012 07:28 AM
Most bi-weekly plans from loan servicers (not bank) do come with fees associated with the multiple payments made each month. Seems strange to fork over $200 per year to structure a bi-weekly payment plan, but that's nearly the universal case.
FYI - If you start a bi-weekly payment plan yourself - sending in 1/2 of the monthly payment on the 15th - the servicing company will treat it as a principal reduction payment. They apply the whole thing to your balance and none of it to your interest due. Come the 1st of the month you'll have to make your full, regular payment because the servicer doesn't have in place a bi-weekly payment plan.
Thanks for reading,
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