Financing in Phoenix>Question Details

Trulia Phoen…, Home Buyer in Phoenix, AZ

When is it better to stick with one's bank instead of shopping around?

Asked by Trulia Phoenix, Phoenix, AZ Fri Dec 14, 2012

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Well, first off - it's not "your" bank, it's "a" bank where you happen to have accounts. If we keep that in mind, then we owe it to ourselves to at least try one other lender, don't we?
1 vote Thank Flag Link Fri Jan 18, 2013
Having worked at a brokerage, bank and direct lender, I've found the rate/fee at direct lenders to be the most competitive. Banks have brick & mortar so that means they have a lot of overhead and brokers are feeling the pinch of over-regulation right now and if the CFPB gets it's way, brokers will all but go out of business soon.

On a tangent, It's interesting to see the answers to the "shop for rates" mentality now (some posts below) vs five years ago before regulation in our industry went into overdrive.

For those agents "still" advocating your borrowers shop lenders to death, keep in mind, NAR's influence will one day wane and you will have people writing similar articles about shopping you for the lowest commissions. P

Something I just chuckled about... A small savings over the life of the loan (let's say 0.125% in rate) vs a big up-front chunk of money (the "un-shopped" part of your commission) compounded annually for the life of the loan also adds up to a big chunk of money, some food for thought. =)
0 votes Thank Flag Link Fri Jan 18, 2013
My take is that it is always better to shop around. You may be able to find a better loan officer and/or a better deal.

Having said that, I don't think the sole decision factor should be the rates. Of course they are important, but you should also consider how you feel about the person. Buying a home is usually a stressful process. The last thing you need is to have to deal with someone you don't like.

By the way - I would give the same advice if you were asking about real estate agents. I believe it is in the client's best interest to shop around until he finds a good one.

Good luck!

Jose Dias, REALTOR | (623) 418-5700 | |
0 votes Thank Flag Link Fri Jan 18, 2013
This is a very good question and I thought I would chime in.

Shopping around banks is like comparing walmarts in your town to the next. The difference maybe pennies if any. Lets be honest, banks are governed all by the same agencies. All you would do is waste your time looking unless your comparing lenders wich are different than banks.

What matters is the person your are dealing with. Are they knowledgable, experienced and truly care about you and your financial ability for the now and the future.

It is always good to get to know your Mortgage person and or Realtor. Do they work as a team for a common goal which is thier clients needs? Ask questions, ask for direction and ask to meet.

Rates, fees and terms are important unless you are into a specialty program or niche product.

Once you have made up your mind, be prepared to move forward and be committed to the process and your team working for you.

For a personal detailed conversation, please contact me at 480-783-6798 or e-mail me at

Manuel Amaya
BBVA Compass Bank
0 votes Thank Flag Link Mon Jan 14, 2013
Comparing financing options can save you a considerable amount of money. Many buyers make the mistake of shopping interest rates and not looking at the larger picture. Getting a great interest rate is important but you should also compare closing costs between different lenders. The difference can be several thousand dollars at the closing table. Typically direct lenders will have lower closing fees than a mortgage broker will. Also you can get a lower interest rate by paying higher discount fees. On the opposite side of that coin is you could take a slightly higher rate and pay less or no fees if you are short on closing funds. I've seen lenders charge $500. in loan fees where another lender may charge you 2% of the loan amount for the same services and interest rates. On a $200,000. loan that would be $4000. in fees at closing for the same services. Shopping around does not create a credit hit as many people believe. So long as you are having several lenders review your credit in the same period of time you will just receive the same one hit as you would if you only talk to one lender. Have each lender provide you with a Good Faith Estimate of closing costs so you can see the whole picture for each lender and can compare all the fees along with the interest rates. If you will only be in your home for a few years you may be better off with a slightly higher interest rate and little or no closing fees.
0 votes Thank Flag Link Mon Dec 17, 2012
Hi Trulia Phoenix,
Your loyalty is to be admired, but your bottom line - and what you will pay over time - needs to be your primary consideration. The time to "stick with your bank" is only when they 1) offer a competitive rate AND closing costs and 2) offer excellent customer service during the entire loan process. Will they give final approval and get your documents done so you can close on time? The answer to this question is critical.

You'll find personable loan officers at nearly every bank, credit union, and mortgage brokers... they are the people who meet with you initially to take your information and get you pre-qualified for a mortgage loan. But that "initial nice person you meet with" is only step one - and that person has very limited control over what comes next. There are many people and departments involved in the loan process, and if your loan isn't handled properly and efficiently every step of the way, through closing, it can be a nightmare.

Best advice? Ask your Realtor for recommendations. Which lenders are giving the best deals and the best customer service? Ask a title company... which lenders seem to get things done right, on time, over and over? Then get your loan quotes - and be sure to compare closing costs, which can vary greatly.

A little extra time spent in the comparison process will be rewarded many times over. Good luck!
0 votes Thank Flag Link Sat Dec 15, 2012
ALWAYS shop around, even to "shave fractions off a rate" despite what some of my colleagues may have to say. The difference between 3.75% and 4.0% (1/4 point, fractions, right?) on a $100,000 loan is a savings of over $5,000 over the life of your mortgage. That becomes real money when you sell your house someday.

And how do you know who is going to close a loan until they either close it or don't close it? In the meantime, all you have to go on is reputation, rates, and fees. That's my humble opinion, anyway.
0 votes Thank Flag Link Sat Dec 15, 2012
Personally, I've never shopped around trying to shave fractions off a rate. Far more important to me is a lender who is going to close the loan - which nowadays is a lot more difficult to do. As Brian mentioned below, a highly recommended mortgage broker (who's recommended in part because his rates are competitive) - ideally one who is local so you and your agent have a better chance of staying on top of things - is the way to go.
0 votes Thank Flag Link Sat Dec 15, 2012
It is almost never best to go with your bank. An independent mortgage banker or broker will almost always be able to offer you better rates and much better service. You don't want to make your decision about your financing solely on the lowest rate quote. You should look for a recommendation from your Realtor, friend, or family member.


Brian Cardenas, Sr. Mortgage Banker
AmeriFirst Financial, Inc.
NMLS # 183143
P: 480.233.7897
0 votes Thank Flag Link Fri Dec 14, 2012
It is always a good idea to shop around for rates and terms. Keep in mind when you do it show each inquiry that each institution has done for you regarding pulling your information if you are talking about a loan.
0 votes Thank Flag Link Fri Dec 14, 2012
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