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I am in the market for a jumbo loan and have been working with two agents from two different banks to see what they were offering.
A background on me, I have great credit scores and a decent income so I do have my credit swagger on.
Prior to finalizing on the home we just put an offer on, I asked both agents for best terms (rates/fees, etc)
based on that I chose to go with Bank A. Since then, Bank B agent has slowly been saying he can do better and now is upto a substantial credit ($5k) on the GFE. This agent started the credits at $1000 then $2K and now he is at this figure. Bank A is going to match this offer now, however he is not happy since I have a "rate lock" with them. They don't have a float down option.
So my question is, how typical is this and can I continue to go back/forth to get the best deal. It was not my intentions to even get to this point as I already had chosen my agent, however it seems there is tons of negotiating room?
We are currently in the process of buying a home (jumbo loan) which closes in mid June. We had started well down the process with Bank A, which is the Bank where we have 2 existing home loans and the majority of our banking business. They were dragging their feet and we miscommunicated when I sent them the purchase contract and apparently didn't understand I wanted to lock a rate and move forward. Their rates started to creep upward, so I called Bank B. They gave us a much lower rate through a special program, one that translates into a savings of about $150 every month.
I called back the Loan Officer we were using (and used twice before) at Bank A and told them the rate and fees (approx) of Bank B and asked if they would match it. They said they would look into it, and I have literally heard nothing from them in a week.
We are sending the remainder of our paperwork to Bank B today and ordered an appraisal. We already had the appraisal done by Bank A and will lose $600. Big deal, we will get that back in 3-4 months with the cost savings.
Bank A lost our business on this loan, and when our two current properties sell and we no longer do auto debt for our mortgage payments, we will close our accounts with them. We are a category of customer they should want to retain, but ultimately, big banks just don't care.......
Rates change several times daily. If you are talking to one lender, then talking with the other one, you may be getting terms post-market change - - terms that make you think Lender B is "better," but perhaps terms that Lender A could also meet, due to that market shift.
So you can easily slip into chasing your tail, and approach Analysis Paralysis, fretting over a meager difference which could be outweighed by Competence. Perhaps widening your gaze a bit, from the myopic micro-focus on rate alone, could yield a more comprehensive quotient of "better."
At the very least, compare terms that are obtained at the same time (within a few hours), and you will at least perhaps glean the Delta in rate/terms, and that, along with your evaluation of intangibles like service and competency, should help you feel right about your decision.
I was in a similar situation. After sending out what seemed like a dozen inquiries, I narrowed it down to two different lenders, an online lender and a large bank. They were responding to my e-mails until 11:30PM, and the larger bank ended up beating the online lender's rate by .1% and offered $5000 towards closing costs. Everything happened in one day, so rate changes weren't a factor. I know a prior poster noted that rate changes happen several times a day - that wasn't my experience with these particular lenders.
I think it really depends on which loan officer happens to get your inquiry...not sure if they're on a commission-based system, but the LO for the large bank was definitely out to get that "sale." Make sure to ask about origination/application/other etc fees specific to that lender, because that might be where they try to make up for their loss. Good luck!
I wanna play! Lol, chase your tail is right. Let me ask you...if I came in at 1/4% less than your best quote and 50% of the competition's fees, and match your credit, would you move your loan? At what point do you say enough? Or do you take that quote to the 2nd lender and say you'll move again?
As a consumer, it's up to you to find the best deal you can. As a buyer, under contract, it's your responsibility to make sure you are not in default and make it to the closing table in time. At some point, though, you will miss that brass ring. It's in our nature to want the best possible rate, but very few of us achieve lowest possible rate bragging rights.
As for rates changing daily, various banks release rates to brokers (a third party) as the market changes, yet for loans they originate, only change 1x day. For over 12 weeks rates were in such a narrow range, we didn't change a single rate and remained a market leader. When it was apparent the market was heading up, we changed fixed rates only. But at my last employer, we changed several times a day.
I wanna play! Lol, chase your tail is right. Let me ask you...if I came in at 1/4% less than your best quote and 50% of the competition's fees, and match your credit, would you move your loan? At what point do you say enough? Or do you take that quote to the 2nd lender and say you'll move again?
As a consumer, it's up to you to find the best deal you can. As a buyer, under contract, it's your responsibility to make sure you are not in default and make it to the closing table in time. At some point, though, you will miss that brass ring. It's in our nature to want the best possible rate, but very few of us achieve lowest possible rate bragging rights.
As for rates changing daily, various banks release rates to brokers (a third party) as the market changes, yet for loans they originate, only change 1x day. For over 12 weeks rates were in such a narrow range, we didn't change a single rate and remained a market leader. When it was apparent the market was heading up, we changed fixed rates only. But at my last employer, we changed several times a day.
Valid points, and as someone who "changed horses in mid stream" so to speak, I am a bit concerned about closing on time. However, as of today, we are 30 calendar days from closing and my new lender has all my information (at least until it goes to Underwriting and they start asking all their "explain this" questions). I feel comfortable the loan should close on time and the lender should be capable of making it happen.
I absolutely agree that sometimes shopping rates is splitting hairs over a moving target and people need to factor in the opportunity cost of their time, but in my case, I ended up with a fixed 30 year loan at 3.75% versus 4.25% and several thousand less dollars I would have to bring to the table. I think it will be worth my time.
Rates change several times daily. If you are talking to one lender, then talking with the other one, you may be getting terms post-market change - - terms that make you think Lender B is "better," but perhaps terms that Lender A could also meet, due to that market shift.
So you can easily slip into chasing your tail, and approach Analysis Paralysis, fretting over a meager difference which could be outweighed by Competence. Perhaps widening your gaze a bit, from the myopic micro-focus on rate alone, could yield a more comprehensive quotient of "better."
At the very least, compare terms that are obtained at the same time (within a few hours), and you will at least perhaps glean the Delta in rate/terms, and that, along with your evaluation of intangibles like service and competency, should help you feel right about your decision.
The rates, LTV are very similar with both banks (both large banks, direct lenders);
Bank A rate 4%, no credits towards closing costs
Bank B rate 4%, ~$5K credits towards closing costs
both the banks closing costs/fees are similar with bank B being a bit more costly. However, that big of a credit still plays huge in my favor.
Bank A is trying to match the deal, however I don't have anything in writing yet, so hopefully they can do that and we can continue moving forward.
Valid points, and as someone who "changed horses in mid stream" so to speak, I am a bit concerned about closing on time. However, as of today, we are 30 calendar days from closing and my new lender has all my information (at least until it goes to Underwriting and they start asking all their "explain this" questions). I feel comfortable the loan should close on time and the lender should be capable of making it happen.
I absolutely agree that sometimes shopping rates is splitting hairs over a moving target and people need to factor in the opportunity cost of their time, but in my case, I ended up with a fixed 30 year loan at 3.75% versus 4.25% and several thousand less dollars I would have to bring to the table. I think it will be worth my time.
As someone that is regularly cited by consumer rating agencies for having consistent low rates, I am all for picking up your toys and playing in another sandbox. But as we both mentioned, not everyone is going to care about your loan as much as you do. And there lies the challenge - finding someone that takes pride in getting you across the finish line, in one piece and on time.
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