Discount lending services on home loans? (appraisal, mortgage, mortgages, fees)

[GoldenKiwi]

Not a veteran, currently saving up for 20% down for conventional to avoid the mandatory lifetime PMI with FHA.

I've seen several GFEs (good faith estimates) from lenders and shocked at how much they charge. I noticed Costco has a home loan program where the lender fees (for executive members) are capped at $600, whereas I know traditional lenders charge ~$1500.

Costco's program is similar to Zillow/Trulia's where it displays rates from different brokers. Even when you factor in the appraisal fee it looks like the total cost ends up being ~$800 which is still significantly less than traditional. Is this a good way to go or is there something better?

Oh, and spare me the "you get what you pay for" line. I do my due diligence in terms of research.

[399083453]

Originally Posted by GoldenKiwi

Even when you factor in the appraisal fee it looks like the total cost ends up being ~$800 which is still significantly less than traditional. Is this a good way to go or is there something better?

There will be allot more fees. Probably another $1k to $2k in fees. These fees would be the same no matter what lender you used.

When people say "you get what you pay for" with mortgages, they are talking about all the deals that fall through and leave the customer paying for the appraisal, etc, and not getting the loan. When doing business with a faceless bank over the phone or internet, those people usually don't care.

When using a local person that you can see in person and who lives in the community, you have a personal connection and will see that person around town. They also want you to speak well about the experience and tell others so they will also use them for a mortgage. There is a stronger motivation for that person to provide professional service and get your loan approved.

When you use someone on the internet, if something goes wrong, they don't care, their name isn't on the building, they will never talk to you again anyway.

From what I've seen, a lender offering low, low origination fees, simply makes it up with 5 other small fees somewhere else. In the end it usually equals the same.

Typically I prefer mortgage brokers and tell others to use the same. They will get the loan approved some how, some way with their wide selection of resources.

What Costco’s really doing is marketing a mortgage product on behalf of another company, namely, First Choice Bank. Let us know how it works.

[NinaN]

^^^ perfectly said.