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Old 05-26-2009, 04:11 PM
 
10 posts, read 22,265 times
Reputation: 10

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Hi Guys,

I am trying to shop around for a FRM for my first home purchase in Journal Square area of Jersey City, NJ.

I have a few questions about the process:

What's the best place to shop around for mortgage loans? I mean looking for the best rates on say a 15/30 yrs fixed mortgage.

Is it acceptable to negotiate with a loan officer at the bank about the rate that he/she offers you?

If so, what are some tactics to use when negotiating interest rates? The first thing that comes to my mind is reminding them of your credit score (if it is good). Anything else that I can/should try?

Also, there are some mixed opinions on this one, I wanted to know what the experts on this forum had to say :

Is it true that if I get Pre-Approved (NOT Pre-Qualified) at more than one bank it will lower my credit history (edit: score) ? I read somewhere that you have 2 weeks after you get your first pre-approval to shop around at other banks without affecting your credit score. Is this true?

I would like to get pre-approved at one bank and get another bank to match rates/fees to get the best deal.

All input is welcome. Thanks in advance.

-K
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Old 05-26-2009, 04:27 PM
 
28,461 posts, read 75,373,495 times
Reputation: 18525
The credit bureaus allegedly have their systems set-up to recognize inquiries from multiple lenders in a narrow window (like two weeks) to be consistent with shopping for a loan. I doubt such activity would result in ones score dropping.

Despite TV ads and web sites claims to the contrary, banks and other lenders really have very little incentive to "compete" on the total package of fees and rates. The decimation of the mortgage broker industry has simple consolidated these lending decisions with fewer people...

Many lenders do reward 'repeat customers' and those that move additional accounts to their institution with SLIGHTLY lower rates (like an 1/8) but even THESE deals are not as common as some lenders really are sick and need to maximize their revenue in an environment where they do not have enough profitable loans...

For those that do have stellar credit scores AND a record of high income AND considerable assets some lenders do open more of the institution's "wealth management" tools to them and this sometimes includes mortgages as well, but generally speaking the "floor level' of assets is over $1M...

Loan officers have little ability to 'negotiate' anything. The rates are set by an internal formula that the lenders have. These policies are driven by the borrowers costs to get capital, and the reality that does not vary much from lender to lender.

My advice is to INTERVIEW several lenders and choose one or two that have an impressive level of organization / ability to meet deadlines. You don't want to be stuck on some 800 number or auto-reply email address with your closing approaching only to find out they need a lost form or the person that you last spoke with got replaces with an employee in Bangalore...
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Old 05-27-2009, 05:17 AM
 
Location: Wake Forest, NC
835 posts, read 3,743,018 times
Reputation: 648
Do yourself 1 big favor. Do not treat a professional Loan Officer like a used car salesman looking for tricks to get the best rate. Interview a few Loan Officers and work with someone your comfortable with as this is worth more than .125% in rate.
Also, remember the best way to get is to give. If you choose to work with a professional and you give a few referrals while in the process you be amazed at the response.
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Old 05-29-2009, 02:39 PM
 
87 posts, read 365,693 times
Reputation: 35
FYI, I wasnt prepared when I put in an offer on my house and therefore had to get pre-approved overnight thru my realtor's mortgage company (credit check #1). Then I applied at 2 different mortgage companies because I wasnt sure which was going to give me the best rate or work the quickest (credit check #2 and #3). I finally closed with everything on time (just over 60 days). However a few weeks later I applied for a Best Buy credit card to get their 0% interest for 12 months for a new tv for the house and was turned down due to "too many inquiries". All three inquiries were within a 2 week period. Therefore, pick the lendor that you will go with so that you only need one credit check.

Also, if you want to negotiate, just mention that you are checking with some other lendors that seem to have better rates etc. If you have strong credit and are putting down 20% you should have the advantage.
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