I have to select a lender for my new home mortgage. Which one should I select?

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Topic Author
TheBogleWay
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Joined: Mon Dec 05, 2016 8:04 pm

I have to select a lender for my new home mortgage. Which one should I select?

Post by TheBogleWay »

Hi All,

A house I really want accepted my offer Friday. I have until Wednesday to select a final lender. The close date on the house is September 30th, so that's a factor is selecting a provider I feel confident can close by then.

The house is about $1.425m, with my 20% down the loan will be $1,140,000. Here are my options:

Option A: Wells Fargo - 3.25% - minus 0.5% - for 2.75% final with no points (even a $1k refund)
Advantage: Wells Fargo will allow me to move about $500k in stocks over to their brokerage (today I use Vanguard) and in return they'll lower my interest rate by 0.5% for an interest rate of 2.75%. I guess having to move funds would be a bit of a disadvantage as it's more work, but it comes with a benefit.

Disadvantage: They're not local. I asked him to be as upfront as possible, and he said he's confident they can close by September 30th, but he's still not local.

Option B: Local lender - 3% with no points, even a $1,000 refund)
Advantages: Local lender with a great reputation, and even a slight personal connection to lender through family. Highest degree of confidence they can close on time and will be ultra responsive, and he's a family friend.

Disadvantage: The interest rate. They are 3% vs the very best Quicken at 2.625%


Option C: Quicken Loans 3.125% - minus 0.5% - for a final of 2.625% no points.
Advantage: Basically just the lower rate, the lowest rate of all options, decent reputation, and does allow me to move $1m to them to reduce the rate by 0.5% for the most competitive rate out of all options. The guy is also pretty responsive.

Disadvantage: Not local, still good reputation. I guess having to move funds would be a bit of a disadvantage as it's more work, but it comes with a benefit.


Option D: Bank of America - 3.125% - minus 0.25%
Advantage: One of the better rates here, plus while it is BoA, I actually did find a local guy who lives a mile from me and is responsive.

Disadvantages: Have to move assets, but it's not $1m it's $500k, and also the rate isn't as good as Quicken.


My favorites right now seem to be between Quicken (for the lowest rate I could find) and the local lender (due to confidence of closing) and super high reputation.

Refinancing seems to be expensive, thousands, and the different in interest rates between Quicken and the local lender saves me $228/month.

What would you do?
Topic Author
TheBogleWay
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by TheBogleWay »

This left the front page pretty quickly so.. just a quick bump!
brad.clarkston
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by brad.clarkston »

I'd pick "Option B: Local lender" all day everyday from that list.
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jarjarM
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by jarjarM »

If you willing to take a bit of risk, chose option C. Quicken should close within 45 days, assuming you have all the documents line up, but maybe pushing it a bit for 30 days. I used them for purchase previously and was able to close in 30 but needed to put in a few calls. Majority of the time, the seller is willing to work with the buyers on the closing day if it's just a few days. Keep in mind that the only way to release earnest money that's in escrow is for both seller and buyer to agree releasing it. The seller generally isn't willing to fight this in arbitration and drag on for months if you need to delay closing by just a few days. If you absolutely not want to take ANY risk with the earnest money and losing the house, then go with option B, the local experienced broker and push it thru. In this case, I would NOT buy down points and will get an ARM. That way, if interest rate drop a bit more, you can simply refi with the best rate and not under closing pressure. Congrats on getting your dream house :beer
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Nate79
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by Nate79 »

I would choose the cheapest - lenders may or may not sell the mortgage anyways. I assume that the rate reduction for Quicken is moving assets to Schwab? Schwab is a top rate brokerage so that's great also.
grp2c
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by grp2c »

Send quicken the local lenders loan estimate (LE) and have them price match prior to relationship discount.
Topic Author
TheBogleWay
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by TheBogleWay »

Nate79 wrote: Mon Aug 31, 2020 9:30 pm I would choose the cheapest - lenders may or may not sell the mortgage anyways. I assume that the rate reduction for Quicken is moving assets to Schwab? Schwab is a top rate brokerage so that's great also.
I think the local one does sell it but everyone in the area says they’re the ones who would be most invested in closing it fast. So while they’ll sell it, it’s about the speed of getting it done.
catlady
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by catlady »

Are there requirements for how long you need to keep the assets with each vendor? What about fees and expense ratios? Will your holdings transfer in kind?
Dottie57
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by Dottie57 »

Surprised you made an offer and it was accepted without a lender in place. That would not fly in my location.

Take whichever one who will approve a loan the quickest.
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TheBogleWay
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by TheBogleWay »

Dottie57 wrote: Mon Aug 31, 2020 10:25 pm Surprised you made an offer and it was accepted without a lender in place. That would not fly in my location.

Take whichever one who will approve a loan the quickest.

Wouldn’t fly here either lol I got pre approved.
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BrandonBogle
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by BrandonBogle »

Skip options A and D. Regardless of what they say, you have a higher chance of not closing in 30 days with them compared to others.

C is hard to turn down, but as others said, would it be close enough that the seller would extend closing if need be? In many places, that is automatically in the offer. In NC, a 14-day extension for closing due to the lender is permitted by the standard contract. However, such things are very regional.
Topic Author
TheBogleWay
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by TheBogleWay »

BrandonBogle wrote: Tue Sep 01, 2020 12:49 am Skip options A and D. Regardless of what they say, you have a higher chance of not closing in 30 days with them compared to others.

C is hard to turn down, but as others said, would it be close enough that the seller would extend closing if need be? In many places, that is automatically in the offer. In NC, a 14-day extension for closing due to the lender is permitted by the standard contract. However, such things are very regional.
Me RR agent said they wouldn’t extend but I got the feeling she didn’t ask much. Hmm.

I guess I can press on this tomorrow and really try to find out. If they could extend I’d do it.
barberakb
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by barberakb »

C. But good luck closing in 30 days. All of the lenders are super busy right now. As well as appraisals etc...
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Sandi_k
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by Sandi_k »

We were very pleased with Quicken when we used them.

I'd go with both, and close with whoever had the docs ready in time. The competition can be useful, as noted in your other thread.
2tall4economy
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by 2tall4economy »

I’ve never had anything but bad experiences and failures from quicken and I’ve given them a chance several times.

Many many others think they’re fine though so your mileage may vary. I would never trust them in a pinch.

B of a similarly made my life miserable with paperwork even though the mortgage guy I connected with was really solid, the underwriters were painful.

I’ve done wells before and I don’t remember anything negative but it was a while ago.

Local lender is a good idea as many said. Try shopping the other rates to them and see what they say.
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celia
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by celia »

I think they'll all re-sell the mortgage, except maybe the local lender. In that case, I'd ask if I would still keep the discounted rate if I move my money away (after the mortgage is sold) or do I still have to keep it with the original lender for 30 years.
ScubaHogg
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Re: I have to select a lender for my new home mortgage. Which one should I select?

Post by ScubaHogg »

No opinion on which one of those you should select, but I will say I've used non-local mortgage companies for my last two mortgages with no issues. Honestly not at all sure how someone "being local" would help? Are they somehow more conscientious just because they are in the same town? They all have an incentive to close
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