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I've used the same broker on the last two houses I've bought. It is nice to have him available, as I've been working with him for five years and he is very responsive. It's also nice to log into one system to pay my mortgages, however; Sebonic is offering 3.6% with no lender fees (saves me about 1.5K) vs 4% and about 1K that my old broker is offering.
The difference in payment over 30 years is about 46K with the difference between payment and principle, not counting interest I could earn on that money. On paper the better business decision is to go with the lower rate, but is it?
I like the relationship I have with my old broker, and being able to log into one system to pay my mortgages, however, I don't think it's worth 46K+, as I can setup auto payment through the two different sites and not have to monitor directly. Once the loan is in place, there doesn't seem to be that much difference in service, but there sure is a difference in money I keep in my pocket.
I went through the process over the phone with one of their reps. I must say, I am heavily leaning the other direction after he just called me back. I was reading the reviews on yelp about the constant delays, horrible service once you lock, and constantly increasing fees each time you talk to them. Sure enough, when he called, although the rate on a 30 year fixed mortgage had stayed the same, all of a sudden there ware $1,600 in lender fees. I am now inclined to believe the horrible reviews on yelp. It hurts to pay an extra 46K a year over the life of the loan but 1) I don't want to risk losing the house due to delays 2) it's potentially worth the relationship....Maybe. I am considering selling my other single family houses and using the proceeds (via 10-31 exchange) to buy an apartment complex, and this guy can help me navigate the waters and determine what's better for me, commercial vs. residential (depending on the size of the complex).
I don't trust Sebonic now, but it is still hard to eat the 46K...
Stop thinking of it as losing 46K. It was just too good to be true or there was a reason they had to buy your business. There's only two reasons someone's rate and costs are lower than market: they have to be to get the business, or, they are a non profit.
You probably know that rates have been moving up and down quite a bit on a daily basis. I'd get all my docs to the current lender to be able to lock and proceed when I feel comfortable. I've seen enough lenders screw up on rental income properties. Once your docs are in, then you can compare quotes.
I was a little confused on your scenario because you brought up the 1031, was the rate of 3.6% for a non owner occupied property? If so I'd get that in writing.
Last edited by thelopez2; 01-16-2016 at 08:31 AM..
You probably know that rates have been moving up and down quite a bit on a daily basis. I'd get all my docs to the current lender to be able to lock and proceed when I feel comfortable. I've seen enough lenders screw up on rental income properties. Once your docs are in, then you can compare quotes.
I was a little confused on your scenario because you brought up the 1031, was the rate of 3.6% for a non owner occupied property? If so I'd get that in writing.
Yes it is on an owner occupied property. The comment on the 10-31 was in regards to maybe using the usual broker as I am considering selling my other houses and using the proceeds to buy an apartment complex as well in a year or two, and that the relationship with this broker might be more important as he can help me navigate the waters.
Sigh, it does still hurt to eat the 46K...no matter how much I try to justify the use of my usual broker. I was hoping someone had some words of wisdom that make it instantly clear which one is the better choice.
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