While I understand a lender could set their margins higher, it's suicide in a competitive market. Even when I worked at one of the biggest mortgage companies in the country, their rates were always competitive even though they had the most overhead of probably any company (lots of brick and mortar).
Outside of a mortgage company that's trying to shark you (usually any intelligent Realtor can figure this out), you're going to be looking at very similar pricing when talking to lenders.
Yes, there's always the flip side and someone could argue their point until the cows come home but consumers shouldn't come into this expecting to find sharks and waste precious time weeding them out, they're looking for an expert to give them sound professional advice who'll be reasonably available when they have questions.
Consumers who're reading this thread have some idea of where rates are (and probably know not to necessarily believe everything they see advertised) and if they smell a rat (or over-pricing), they're going to seek out a second opinion regardless of how well endorsed someone may be.
I have high producing realtors in areas outside of my local market sending me clients, not because I provide the absolute lowest rate (although it's always competitive) but because I give their clients the experience they're looking for in the biggest transaction the'll make in their life and the knowledge/expertise to back it up. This is what every loan officer should be doing for their clients and many of you already do this. This isn't an attempt at self promotion, I'm just making a point that the "lender" search should really be a "loan officer" search in our current market. No matter how much regulation there is in an industry, there's always going to be someone another lender can call a shark. I.E. I've seen discount (commission returns) Realtors do this to non-discount Realtors to elevate their standing as the "Agent of choice". While I don't want this to become an issue of what is or isn't fair with respect to compensation, my point is that given any industry, one could make a similar statement.
As I stated previously, find a professional, someone who's clearly proven themselves and go from there. If you're looking for specialized financing, find someone who specializes in it.
Best of luck in your search!
P.S. Notice I didn't put my company/contact info at the bottom? Trulia frowns upon (blatant) self promotion, lets clean up the forums guys, contributors on other sites make fun of you guys who post all your contact info here. If a consumer wants to contact you, they're smart enough to click on your picture and pull up your profile.
It's true, as a loan officer, I have to get paid the same percentage on every loan I close, regardless of loan amount and loan type (FHA, Conventional, etc.). My bank doesn't charge any points, and has the lowest rates. But each company has their own compensation structure. I can go and work for another lender whose structure is based on much higher rates and a point or two on every loan, and I can more than double the percentage I'm allowed to get paid on each loan I close. In fact, I have friends who work for such companies. Because these lenders yield higher fees, they are able to pay their loan officers a higher percentage on every loan they close. So I can go from making 1% on each loan to 2% or sometimes even 3% on each loan, but I would then have to offer higher rates and fees.
Again, there are several different lenders, with a variety of compensation structures. This has a direct impact on what fees, points and interest rates YOU will pay.
My advice is meet with your Realtor's broker and see what he/she has to offer. Then see if you can also meet with another loan officer that serviced someone you know. Usually if a friend or family member have nothing but great things to say about their loan officer, it's worth a shot.
But be careful, just because you may love your broker, it doesn't mean you'll love his/her loan officer, or that they'll provide the best terms. Always best to sit with more than just one loan officer and see what they can do for you.
Don't shop interest rates only, shop a reputable mortgage professional. there are several different types of companies, it's a matter of finding what's the best fit for you.
If you'd like, I'm always available to meet in one of my Queens branches. Good luck!
Senior Loan Officer
Sterling National Bank
Your best bet is to find a competent loan officer that can walk you through the process the way you deserve to be. If you're looking to get a loan that is somewhat/completely specialized, it's in your best interest to find someone who specializes in that product (I.E. Rehab loan, get a Renovation Specialist, Reverse Mortgage etc).
I wouldn't believe anyone who says, "FHA" or "conventional" loan specialist, that's just BS salesmanship).
I don't know perfectly.If you any more question you can ask feel free to reverse mortgage lenders direct.They are very helpful.
But Javier makes a good point, too, and it goes to something Rob said about "sharks." Rates and fees CAN be substantially higher at some Lenders. The smart consumer---who has a basic understanding of average rates (not ADVERTISED rates)---can easily spot the "sharks" who are charging substantially higher rates and fees.
When all is said and done it really and truly comes down to the quality of the experience the consumer will have as they undertake the biggest financial decision of their life.
If you are worrying over .125% or .25% in the interest rate or $300 in fees then you're not truly contemplating the quality of the experience. That's what they used to call "penny wise and pound foolish." For the biggest financial event of your life, you must consider the quality of the professional who will guide you through calmly, carefully, and with clear, concise communication.
This is true when you're shopping for an attorney, too. Here in the NY Metro Region attorneys are an integral part of the real estate transaction. It drives me nuts when a consumer tells me, "Oh, I spoke to those 3 (real estate) attorneys you recommended, but I'm going with this other attorney who's charging me $350 less than those other attorneys." REALLY? $350? Here in New York real estate pros can recite many, many horror stories about consumers who made poor choices for either their mortgage professional or attorney (or both!) based solely on price considerations.
You don't shop for a lender, you shop for a mortgage officer. You need to find one that you are comfortable with. They will work out a budget with you so that you can see where you are comfortable. All lenders are using the same money so rates should not differ from lender to lender. Asking for a quote over the phone is no good since your credit scores and DTI affects your rate.
Understand that interest rates are very much like the stock market, so when comparing the two it may be difficult to get an fair comparison. Be sure to ask how they are different from one another. Closing on time without jeopardizing your earnest money is very important to Buyers.
Have an amazing day!
If you would like recommendations, I would be happy to provide you with contact info on those I personally prefer to use and with whom I have had great success.