Not all banks and lenders are created equal. On the other hand neither are buyers. Using the tools that each institution has in place, unfortunately most try to place you into a package "they" have, as opposed to building a loan package that is most suited to "your" needs.
For the most part unless you actually work for the bank or already have a mortgage with them, they are not likely to give you the best program. They only have "their" package.
On the other hand, a good mortgage broker can "shop" for the program that is best suited for you. If the lender you are using is worth their weight in salt they will listen to your long term neeeds. Why, because this is a long term commitment and goals need to come into play.
Many today are not upsizing or downsizing, they are right sizing. Same with lenders as they take on mortgage clients. They need to find the 'right" program for the consumer that will be marketable for the lender in the future as well.
I always guide my clients to get a good faith estimate from two you are most comfortable with and we sit down and compare together. Always good to have a second set of eyes looking at the numbers. Chances are if their is a big difference, the other will meet or beat it. Banks do not usually have that option.
I have my short list of lenders that I believe will put your concerns to the forefront. They are listed on my website http://www.RobertaNopson.com
If you need any assistance in your buying needs here in West Linn. I would welcome the opportunity to earn your trust and confidence.
Accredited Buyers Representative
Some other questions might be what type of service can you expect for the fees that the lender is charging. I have clients that were late in closing their escrow because the mortgage broker waited until the last week to inform them of additional requirements from the lender before the loan would receive final approval for issuing documents and loan funding. In that instance the mortgage broker knew three weeks prior.
I have also worked with a mortgage broker that stayed on top of every phase of the transaction, updating me with weekly reports, with loan documents in escrow two weeks before they were needed. Even the escrow officer was surprised, but very pleased. Needless to say that mortgage broker will be receiving referrals from me in the future. Good service for a fair price is not too much to ask, from your mortgage lender as well as from your realtor.
Good luck with your home purchase.
The short answer is that it just depends upon how agressive the provider is in trying to make money. Part of what comes into play is the secret life of a home loan. A home loan is more than just a piece of paper where a lender promises money to a borrower in return for interest. It is a commodity - precisely the factor that led to the 'mortgage crisis'. Lenders bundle groups of loans with certain risk levels and sell them on the open market as a commodity, just like a stock or a bond.
Now look at the different players and their interest in this primary part of the business. If you are a bank, you may be keeping some of the loans as part of your own portfolio, but you may also be planning to sell some on the open market. Wells Fargo is an example of a large bank that carries a lot of its own 'paper' (loans). Of course, if you are the bank, you are only offering your own bank's programs. Banks may be able to offer slightly lower rates but may try to make up some income with higher transaction fees.
Contrast that with mortgage brokers who can shop for the best loan program any where: with any bank or government agency. Some mortgage brokers only place loans. Other mortgage brokers self-fund the majority of their loans, effectively acting as private lenders. Then they sell those loans on the secondary market. These lenders may offer slightly higher rates, but have lower transaction costs.
So, how do you know which loan is right for you? Well, this is where the Good Faith Estimate comes into play. Every lender should be able to provide you with a good faith estimate. That should level the playing field. Not only will it show you your actual payments, but also your true APR (annual percentage rate) with both the interest rate and the transaction fees added together.
The two lenders that I refer most often are:
Julie Atchison, Landover Mortgage
Aaron Johnston, Mortgage Trust
As a final note, a truely exceptional lender will look at you home loan and the rest of your financial goals and pick a program that really fits your needs. For example, when are you planning to retire, could your get a better return on your investment by having a lower mortgage payment and investing the difference elsewhere? Don't hesitate to 'get deep' with your mortgage professional to really test their knowledge. Likewise, get multiple bids and ask each mortgage pro to match the best points of others. You might be surprised at how flexible a lot of their fees really are.
If there is anything else that I can to do assist you, please don't hesitate to call. As you can tell, I like to get into the why behind things. It serves me well as a Realtor.
Kate Myers, Realtor, GRI
Coldwell Banker Barbara Sue Seal Properties