Ally Bank Mortgage (loan officer, pre-approval, credit card, 30 year fixed)

[notkim]

Hello,

We are going to start looking at houses once the Spring market is in full action here in TX. My question is regarding Mortgage / Pre-Qualification / Pre-Approval.

So I called around and got the Mortgage Quote aka Initial Fee Quote without having them run our SSN. I gave them our loan requirements and credit score.

Here is what ALLY Bank gave me vs my Bank vs MB for a 30 Year Fixed w/20% down Jumbo Loan.

1. Ally Bank
Int. Rate = 3.99% (APR 4.014%)
Discount Points = 0
Origination Fee = $995 ($500 discount on $995, making the Orig. Fee $495 if we have a 30 day old account (Savings, CD etc) with them).
Lender Credit = $1,159 *****
Appraisal Fee = $550
Credit Report Fee = $34
Flood Certification = $5
Tax Related = $70
Govt. Recordong Fee = $134
Othe/Misc = $120 *** Other lenders did not have this charge.

2. My Bank
Int. Rate = 4.125% (APR 4.149%)
Discount Points = 0
Origination Fee = $1,335 ($600 discount on $1,335 making Orig.Fee $735 bec we have a banking relation with them).
Lender Credit = $0
Appraisal Fee = $580
Credit Report Fee = $26
Flood Certification = $5
Life of Loan Flood Monitoring = $8 *** Other lenders did not have this charge.
Tax Related = $89
Govt. Recording Fee = $180

3. Mortgage Broker A
Int. Rate = 4.375% (APR 4.415%)
Discount Points = 0
Origination Fee / Flat Lender Fee= $995
Lender Credit = $0
Appraisal Fee = $550
Credit Report Fee / Employment Verification Fee = $150
Flood Certification = $8
Govt. Recordong Fee = $175
Doc Prep / Attny = $125 *** Other lenders did not have this charge. (This is not Title Closing / Attorney Fee. There is a separate line item saying "Title Closing/Attorney Fee = $450").


I can give the Title Search, Lender's Title, Title Closing/Attorney Fee for each lender, but from what I know that will be services which I can shop for and the Lender has no control over these charges. Let me know if you'll need it though to help me.

So if I understand correctly Ally Bank is the best until now? If YES, is this a "too good to be true" scenario? How is Ally Bank Mortgage? Anyone have any experience with them?

I understand that I should "shop mortgage" AFTER we are under contract, but how do I do that after I have a contract in place? I think in TX there is 10 days contingency. So we put in a contract and that same day I rate shop with ALL lenders again? I will go into a panic I think if that is what is to be done.

I do not have a realtor, and I know that my realtor can guide me best with these questions when they arise, but just wanted to do my homework beforehand rather than rely on someone. Is the above method the right way to go about mortgage shopping?

TIA !!!

[notkim]

Wanted to add that the reason I called 3 lenders is to get an idea as to what the fees (Origination, Lender Fees etc) are and NOT RATE shop. I know that the rates change daily.

Was it the correct way to go about?

Also, when one goes under contract and has 10 - 15 days contingency where they have to get inspection and appraisal done, how do you rate shop at that moment? I read somewhere that we should get an appraisal done BEFORE an inspection; so if the appraisal comes low than the contract price, we can ask to negotiate it down and if the seller is not ready to lower the purchase price, then we can back out of the contract and that way we have not wasted money doing the inspection 1st.

My concern is how to shop for a lender (who orders an appraisal) and get an inspection done with 10 - 15 days? Is it possible?

[docwrangler]

I have no experience with Ally. Do they have a local presence and did you or can you meet with a loan officer? Fees are going to be fairly consistent across lenders. A zero-point loan at 3.99% seems unlikely to me, though jumbo rates are a tish lower. If you have a good relationship with your bank and can meet with a loan officer, that'd be a fine place to get your mortgage; their fees and rate look very reasonable.

You don't want to continue rate shopping after you have the appraisal done, because then you'll need another appraisal - unless the original one is willing to release it to the new lender. When you're getting a loan, the appraisal has to be ordered by and delivered to the lender. You can order your own appraisal for a cash purchase, but otherwise it's not a great idea unless you enjoy spending money. It may be possible to get an appraisal done in a 10-15 day window; I don't know how fast appraisals are in your area. It would definitely be possible where I am. Our appraisal management company has a 5-day turn time right now. Other parts of the country, you sometimes have to wait 4-6 weeks for an appraisal.

Now, if you decide on a lender, get into contract on a property, get the process going, and then find that you're getting bad service or just feel uncomfortable, you can switch lenders midstream. It does happen and it's not the end of the world. You will likely have to eat some fees. The old lender may make you pay for your credit report fee, flood cert, appraisal - anything they've paid for up front that they don't consider a cost of doing business, you could be liable to pay.

My advice would be to get your loan from a bank or mortgage broker you feel comfortable with. The only drawback of rate-shopping is that you may sacrifice good service for a slightly better rate. If this is your first house and you have no realtor to help you navigate the process, a knowledgeable and communicative loan officer is going to be a huge help to you. I'd be shopping for service over rate.

[notkim]

Originally Posted by docwrangler

I have no experience with Ally. Do they have a local presence and did you or can you meet with a loan officer? Fees are going to be fairly consistent across lenders. A zero-point loan at 3.99% seems unlikely to me, though jumbo rates are a tish lower. If you have a good relationship with your bank and can meet with a loan officer, that'd be a fine place to get your mortgage; their fees and rate look very reasonable.

You don't want to continue rate shopping after you have the appraisal done, because then you'll need another appraisal - unless the original one is willing to release it to the new lender. When you're getting a loan, the appraisal has to be ordered by and delivered to the lender. You can order your own appraisal for a cash purchase, but otherwise it's not a great idea unless you enjoy spending money. It may be possible to get an appraisal done in a 10-15 day window; I don't know how fast appraisals are in your area. It would definitely be possible where I am. Our appraisal management company has a 5-day turn time right now. Other parts of the country, you sometimes have to wait 4-6 weeks for an appraisal.

Now, if you decide on a lender, get into contract on a property, get the process going, and then find that you're getting bad service or just feel uncomfortable, you can switch lenders midstream. It does happen and it's not the end of the world. You will likely have to eat some fees. The old lender may make you pay for your credit report fee, flood cert, appraisal - anything they've paid for up front that they don't consider a cost of doing business, you could be liable to pay.

My advice would be to get your loan from a bank or mortgage broker you feel comfortable with. The only drawback of rate-shopping is that you may sacrifice good service for a slightly better rate. If this is your first house and you have no realtor to help you navigate the process, a knowledgeable and communicative loan officer is going to be a huge help to you. I'd be shopping for service over rate.

Thank you for your reply !

Ally Bank is an Online Bank. They do not have a local presence. I came across them when I was looking for an Online Savings a/c that gave good rates. I saw a lot of people recommending them for a great Online Savings a/c. I have NO idea about their mortgage side. They have their rates published today on Bankrate.com and even their website as 3.99% (APR 3.993 or 3.997%) for Jumbo Loan 0 points.

No, I will for sure not "rate shop" after I have selected a lender and specially after an appraisal has been ordered and paid for (by us). Once the wheels have started turning, rate shopping is like trying to see if the grass is greener on the other side. It is never ending.

Ally Bank is Online only and my bank is brick and mortar. We had a mortgage before with our bank and were satisfied. This is not our first time getting a mortgage, but the 1st time (7-8 years back) we were very naive to home buying process and did not technically rate shop at all. We just walked into our bank and they gave us a rate (2.75% --- 15 year fiexd --- 0 points --- few hundred $$ as lender credit). Another local lender called me (our then realtor gave our number/referral), but we did not know or bank with them, so I was not comfortable. I told them what my bank was offering and they upfront told me to go with MY bank bec they cannot beat that rate/fees.

The mortgage process is very rusty in my mind from 7-8 years ago. We did not even know what discount points were etc. So thought about asking here, as to how to select a lender.

Ally Bank offer is tempting vs My Bank at 3.99 vs 4.125 PLUS $1159 in lender credits for a 0 points loan, but just the fact I do not know much about them is what is not sitting comfortable with me.

Would someone let go of $1159 lender credit and a slightly lower rate difference and go with your local bank for 0 lender credits and a slightly higher rate?

When people on here talk about "service" that a local mortgage broker or local bank can offer, wht exactly do they mean? I do not recall any issues that we faced with our local bank when we did the mortgage with them. There was no after the loan was closed interaction with the loan officer. So what and why is "service" is s deciding factor when choosing a lender?

[docwrangler]

As to the Ally rate, what is your credit score? A rate listed on Bankrate does not take into account your personal situation. If you have a credit score over 760 and a low DTI, you will likely qualify for the lowest rate. If not, your actual rate could be much higher.

If you're confident that you'll qualify without issue (plenty of W-2 income or consistent self-employment income, no credit problems), go ahead with Ally. I consider myself pretty tech savvy and do a lot of business online, but I don't know that I would go with an online-only lender. Then again, I don't have to because I work for a mortgage broker, so it's easy for me to say that.

Service from a local mortgage broker or lender: they have the knowledge and experience to know what documentation will get your loan through underwriting smoothly rather than a bunch of back and forth that can be frustrating for the borrower. They will meet with you face to face and/or keep up good phone or email communication, and you'll likely speak to the same 1 or 2 people every time, who are familiar with your loan file. With brokers, they work with several different lenders, so they have program and rate options that banks may not be able to offer; however, you will likely pay a little extra for that, in the form of either higher origination fees or slightly higher rate so they get paid when selling the loan to the lender.

When you didn't face any issues with your mortgage through your local bank, that was probably because you had a good team working behind the scenes for you. The process *should* be seamless and relatively painless for the borrower. You may not get that using an online lender. I say "may," because maybe you have the simplest loan file ever: consistent W-2 income with over a 2-year history at the same job, good credit scores, low debt-to-income ratio such that no finagling is necessary to get you to qualify.

I'm not trying to scare you away from Ally. I'm just letting you know that there is a difference in service. Good service is often invisible. When you have a great experience with a lender, it's not always because you're an easy customer; sometimes it's because your mortgage team are rock stars, and you don't know about any problems they had getting your loan closed. That's part of giving you a good experience. I don't tell our clients what I had to do to clear their underwriting conditions. It's my job, and, admittedly, I get kind of a sick enjoyment out of debating regulations with underwriters. That's something you may not want or be qualified to do. But again - you may not encounter any issues. You really don't know until you try.

Sorry this doesn't really tell you which lender to choose, but only you can make that decision. I would just say to be prepared for a bit more work and hassle on your end if you don't have a team working for you.

[Pfhtex]

what is the loan amount

[notkim]

Originally Posted by docwrangler

As to the Ally rate, what is your credit score? A rate listed on Bankrate does not take into account your personal situation. If you have a credit score over 760 and a low DTI, you will likely qualify for the lowest rate. If not, your actual rate could be much higher.

Originally Posted by Pfhtex

what is the loan amount

Purchase Zip: 77382
Loan Amt = $560 or $600 (after factoring the 20% down)
Credit Score 800+
No debts like student loans, auto loans, previous mortgage. Other expenses are monthly credit card expenses which are paid in full, Rent, Utilities.

[notkim]

Originally Posted by docwrangler

You may not get that using an online lender. I say "may," because maybe you have the simplest loan file ever: consistent W-2 income with over a 2-year history at the same job, good credit scores, low debt-to-income ratio such that no finagling is necessary to get you to qualify.

"Consistent W-2 income with over a 2-year history at the same job" --- This is going to be an issue then. The new job we accepted in TX and moved for is just 6 months old and there is a DRASTIC difference between the pay as well (new job pays more).

Other than this there is NO other issue that I see. Nothing alarming to red flag our loan processing.

[docwrangler]

Originally Posted by notkim

"Consistent W-2 income with over a 2-year history at the same job" --- This is going to be an issue then. The new job we accepted in TX and moved for is just 6 months old and there is a DRASTIC difference between the pay as well (new job pays more).

Other than this there is NO other issue that I see. Nothing alarming to red flag our loan processing.

It's not a problem; it just causes more documentation requirements. It's good that you're making more rather than less. The lender will have to document 2 years of your employment history, so they will request verifications from your old employer as well as the new one. Getting verifications *should* be easy, but it can cause delays depending how fast the employers respond to the request. Underwriting may require a letter of explanation from you if you've completely changed industries in addition to the increased salary. They don't always, but it does happen.

Just some things to expect.

[arwenmark]

I personally would never trust an online only bank, had bad experience with lighthouse bank which was online only. And certainly not for a mortgage.
I find that using a local bank that does not sell on their mortgages was the best for us.