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I am going to be a first time buyer and looking for some suggestions on who to consider. Could you let me know what your experiences were...bad or great.
They had good rates when I was looking. If you plan to do 10 years or less DCU has competitive rates. They start to become less competitive after 15 year loans.
I got a 7/1 ARM @ 3.125% at Milford Federal with 15% down, no PMI, a few hundred bucks credit at closing for being a first time home buyer. This was in the fall of 2013. Yes, I knew all the risks of an ARM and they explained all the scenarios. The 30 year fixed had gone up over a 1% more than the ARM. Over a 7 year period that meant I would spend over $10,000 more in interest had I went with the 30 year at 4.xxx%. I figure how often do the first time home buyers stay in their first place? Plus, I could always refinance if I wanted. I've been making payments as if I went with the 30 year @ 4.xxx%, so I've been prepaying a little towards principle each month. Basically at the end of the year it's like I made a little more than two extra payments.
Last edited by Louisville Slugger; 09-05-2014 at 11:21 AM..
I think if you are going with a direct lender then it doesn't matter who you use. Go for the lowest rate possible while taking into consideration any points and fees charged. The problem I've run into in the past is direct lenders sometimes get backed up and they push your closing date back which might cause problems if you need to close by a certain date.
To avoid all that hassle, I used a mortgage broker (Asset Mortgage Group in Natick) for the house I bought last year. They pretty much handled everything for me. All I had to do was email them any requested documents and they did the rest. I compared the rate I got (30 year fixed @ 3.875% with a credit at closing) and it was comparable to the best rates I was finding online at the time.
The best advice I can give you when it comes to selecting a lender is to stay away from big banks like Bank of America. They're awful to deal with and will cause you nothing but grief. Local banks, direct lenders, and credit unions are usually the best way to go. Shop around based not only on the rate you're being offered but also on the closing costs. Any lender should be happy to provide a good faith estimate of costs (GFE) upon request. Lastly, choose a lender that gives you the impression that if you choose them that they will actually be able to get you to the closing table on time. Some are pretty bad at that. Ask co-workers, friends, relatives who they have used but even better than that is to ask your real estate agent who likely has more experience dealing with these people than all your friends, relatives, etc. combined.
Bank of America had the lowest rate (3.25% for 15-year fixed on a "jumbo"--no actual higher rate for being in the jumbo range) + costs, so I went with them. They had many missteps and documentation issues, and I needed to stay on top of them, but we made closing ok. I was also recommended Mortgage Master, but at the time their best rate was 0.5% higher than what I could get from BofA.
I'd suggest planning ahead to see what special deals you can get with banks on mortgages--most have some rate discount if you have x dollars in an account with them, so it pays to establish a relationship with banks who you might wish to apply for a mortgage.
Thank you everyone!! I hope suggestions keep coming!
Allharv-great planning tip (xdollars in account)
Parsec- Did you do local comparables? I know you mentioned the importance of looking at both closing and rates but wondering if closing on time was your biggest determining factor in your choice, despite rates of broker being sim to online; how about closing costs.
Summary:
Mortgage Masters (South End) -may have little higher rate but perhaps customer service better? (2p)
Bank of Canton-(2p)
Hanscom Federal Credit Union
Milford Federal- rates better on shorter term loans
Bank of America -may have low rates but closing could be sticky, jumbo loan
mortgage broker-Asset Mortgage Group in Natick-comparable rates as online but unknown closing fees
I'm surprised Bank of America would have the lowest rates because usually TD Bank can be counted on to be lower. But then all the local banks and credit unions may be competitive against TD Bank.
But I asked Mortgage Masters to compare rates with Hanscom FCU and the lowest rates were similar. These were for safe, 30-year conventional loans with no prepayment penalties.
The one thing I have learned on this journey, is that not everyone has the same knowledge on loan processing,etc. I went to one person and they gave me questionable information. While I think she is great and would continue to have great customer service throughout the process, I believe I could be misguided, which could make the loan process drag on!
I personally wouldn't consider Bank of America for a traditional loan on my first home purchase, even if they did have low rates. I also read some questionable things about mortgage masters. So if someone does recommend them (MM), then I would want to know WHO they recommend.
Sharencare-what was your impression of MM and Hanscom FCU? Have you called bank of Canton yet?
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