Question about getting a mortgage. (deal, service, recommend)

[TomMoser]

Many fine lenders have been mentioned in this thread, and knowing what I know of you from back when we first saw you posting about looking for a home, I think that you should just shop around with a couple of the major banks and go with what you are comfortable.

Please keep us posted.

[totallyfrazzled]

Originally Posted by rocafeller05

Great & congrats! But shouldnt you be approved before the bid? What happens if you dont qualify for a loan?

What the majority of househunters do is to just get a prequalification (being verbally told "you'd qualify" after verbally telling a bank-branch mortgage rep their financial numbers) while they're shopping. The problem there is that there's absolutely no commitment expressed or implied by the bank or mortgage company. It's the mortgage equivalent of "hearsay evidence."

The really smart thing to do is to apply for a pre-Approval (Conditional Mortgage Approval) while you're still looking. This is an approval with the understanding that you haven't yet found a specific property you want to buy. It's the same process that anyone goes through when they actually apply for a mortgage. Because it costs money (whatever that bank's standard mortgage app fee is, which is several hundred dollars) most people balk at getting more than just the freebie "pre-qualification".

A Conditional Approval will say that the bank will lend you X dollars at X rate for X term, subject to their approval of the house you eventually end up going into contract to buy. The Conditional Approval is usually good for 3 months but can be renewed a couple of times with new documentation proving that nothing in your financials has changed for the worse.

The great value of these is that (a) You have already been actually APPROVED for the mortgage itself, and so (b) it's a huge timesaver when you really do get the contract of sale executed. All you need to do then is to give a copy of that contract to the bank and they can move right into sending their appraiser out to look at it. There's no waiting around for the bank to decide whether they are indeed willing to give you that mortgage after all, because you're already past that point which usually takes at least a couple of weeks if you have to start the mortgage process from scratch (or with nothing but a pre-qual).

[TomMoser]

Very good explanation. Most people don't know the difference between a prequalification and a preapproval. With a preapproval you are always in a much stronger negotiating position, especially since so many deals fall apart these days due to the buyer being unable to obtain a mortgage.

[rocafeller05]

Yep, I learned something today. I always thought you HAD to be be-approved before putting in a bid.

Originally Posted by TomMoser

Very good explanation. Most people don't know the difference between a prequalification and a preapproval. With a preapproval you are always in a much stronger negotiating position, especially since so many deals fall apart these days due to the buyer being unable to obtain a mortgage.

[Elke Mariotti]

Originally Posted by rocafeller05

Yep, I learned something today. I always thought you HAD to be be-approved before putting in a bid.

Many sellers insist on it before considering/negotiating an offer from the buyer.

[AB1]

I work for a Mortgage Broker and use Wells Fargo if there rates are the best. The difference between a broker and lender is the lender has one bank I have numerous and go where the best rate is. I would love to chat with you if you would like more info.
Angela

[StrugglinLI]

I found the broker to be helpful. We did switch mid-stream during the paperwork because Wells Fargo interest rate dropped below Hudson City for what I needed.

I dealt direct with Washington Mutual, which was also easy (although I do NOT recommend them; service after the deal was signed is from somewhere else in the country and was horrible).

Having a person who is looking at everybody's rates made sense for me. I think they also get an email every morning with upcoming rate changes??

[totallyfrazzled]

Just curious, did you think that the service the broker provided was worth the fee that you had to pay? And if you don't mind saying, how much of a fee did the mortgage broker charge?

[StrugglinLI]

I definitely think it was worth it. Just having somebody familiar with the process to walk me through was valuable. The broker works for you.. whereas when dealing direct with the bank, well you know who the bank rep works for, and it isn't you!

The problem is so many brokers have popped up I would guess it's easier to find a poor broker who isn't worth his weight in salt than it is to find one that will honestly work hard for you.

As I said earlier, I didn't feel I got the attention I was paying for in the beginning. I got another broker and found their pricing to be pretty much the same as the first.

I really liked the first broker, we got along great. Unfortunately I think he began to treat me more like a friend than a boss.

I contacted another broker a friend recommended. I had her appraiser come out.. I think it cost me $350 before he stepped across the threshold. After the appraisal this new broker's attitude changed, like "aha, I got you to shell out $350 so now I own you" Quoted prices waffled "oh I didn't know your house was that big"

Told her keep the $350 and don't call me. Actually, it was the appraiser's $350, so she didn't make anything. I got a sob story message on my voicemail about "we all worked so hard for you".. puh-lease.

I called my original broker, who I really liked, about a month later and he said "hey, what happened, I haven't heard from you". I told him I felt I wasn't getting what I was going to be paying for at the closing table and contacted another broker.

Lucky for me, he straightened right out and really worked hard for me to close the deal. I didn't get any attitude from him; he realized he was working for me and did the right thing.

In the end, remember: a broker works for you. You will likely only use him/her once in your lifetime. i have no problem pitting them against each other to secure the best deal. The broker that deserves your business will work the hardest.

I will look for the brokers fee, I don't recall what it was, but I have the paperwork.

[StrugglinLI]

I paid 1.23% broker fee.