Banking in Folsom area (Sacramento, Paramount: mortgage broker, refinance, credit)

[MapleLeaf]

We got verbal approval for banking/credit and mortgage services from Bank of America and Wells Fargo. Which one is better to deal with ( in you opinion)?

[x15]

I wouldn't deal with either of them.

In Canada, most of the banking industry is concentrated in something like 4 or 5 really big nationwide banks.

Going back to the depression, the US has something called credit unions, that are non profit organizations owned by their members. In Sacramento the big industry was state government so the state government employees credit union , the Golden 1 became big with lots of branches in the area. Then the law was amended to let credit unions to provide services to anyone within a given area.

The big thing about the Golden 1 is that they will charge you much less fees than either Wells Fargo or BofA, they generally will lend for less and pay more on deposits.

See for yourself.

https://www.golden1.com/

[MapleLeaf]

Originally Posted by x15

I wouldn't deal with either of them.

In Canada, most of the banking industry is concentrated in something like 4 or 5 really big nationwide banks.

Going back to the depression, the US has something called credit unions, that are non profit organizations owned by their members. In Sacramento the big industry was state government so the state government employees credit union , the Golden 1 became big with lots of branches in the area. Then the law was amended to let credit unions to provide services to anyone within a given area.

The big thing about the Golden 1 is that they will charge you much less fees than either Wells Fargo or BofA, they generally will lend for less and pay more on deposits.

See for yourself.

https://www.golden1.com/

Yes, in Canada 5 big banks + Citi and several credit unions.
In US it's more confusing....

You are rignt about Checking account in Golden1, but I checked that mortgage rates are better in Wells Fargo or BofA.
Also, I figured out that generally US doesn't recognize Canadian credit history (it's extremly stupid imho), so I'm not sure that small banks/unions would like to deal with us. However, BofA is more flexible (I talked with them on the phone) and Wells Fargo working with company that relocates us (so we contac manager directly).
Another option is Citi, but their services extremly expensive aven in Canada

[x15]

For the mortgage itself, it may still be cheaper to go through a mortgage banker.

In the US when you get a mortgage, generally the loan itself is sold off either to Fannie Mae or Freddie Mac or they are sold off directly in the secondary market. So in the US its not just banks that offer mortgages, you had mortgage banks like Countrywide and big financial companies like GMAC making mortgages and selling them off in the secondary market. When the mortgage gets sold, you aren't aware of it because generally the company that issued you the mortgage is still responsible for servicing the mortgage (collecting the payments).

This has created demand for something called a mortgage broker. What these people do is shop around from all of these different mortgage providers and tell you which instituion will give someone with your employment and credit history the best rate. If you close the deal with them, they earn a commission.

Before I went with either BofA or Wells, I would contact a mortgage broker in Sacramento and see if they can get you a better rate.

Here is one local mortgage broker who advertises a lot, and someone else on the thread might suggest other mortgage brokers to deal with. But if you can, I would reall try to avoid BofA or Wells because they always kill you with various fees.

Attached is a link to site by a Professor at Wharton who does a pretty good job of explaining the ins and out of the mortgage process in the US and its probably worthwhile to spend a little time reading up there to get up to speed on how things are done here.

Home

Also this a link to a local mortgage broker who advertises a lot in Sacramento. I suspect as the thread continues, you will probably get recommendations for other brokers as well, but this guy has an internet site you can do some shopping from Canada.

Paramount Equity Mortgage | Refinance & Debt Consolidation Specialists

[MapleLeaf]

On high level , what is a difference between: 30 Year Fixed and 30 Year Fixed FHA,
and between 5-Year-ARM and 5-Year ARM FHA?

[x15]

FHA loans are loans that where the government agrees to insure the lender against certain types of default. The advantage of an FHA insured loan to the borrower is that normally he can come in with less money down. Not all properties are eligble for FHA financing, normally the home has to be inspected first to make sure its eligible, so in theory these homes have no structural problems. There are limitations on how much money you can borrow under these programs because the idea of the policy was to help people of modest means buy homes that weren't crappy.

For the most part your lender is going to demand a housing inspection as a condition of getting a loan, so you know what problems the home has, so the FHA inspection process seems a bit superfulous.

[MapleLeaf]

Thanks for explanation!

BTW, do you know if I can negotiate for published mortgage rate? We're planning to pay at least 50% up to 70% downpayment. Can I ask bank to reduce rate?

[edwardius]

Ask your mortgage broker.

[SpanielGirl]

You need to know a real bank-Bank of the West. Best bank ever. I left Wells Fargo because they are obnoxious, rude, and will screw up your account and then tell you to it is your fault. The people at Bank of the West greet me (and every other customer) by name when we walk in, I have never had a problem with my account, their fees are lower than other banks, and I have never waited for a teller if I need one. I would never go to one of the bigger banks-bigger banks, big problems.