When shopping around for refinance, what else should we consider other than getting the best rate? Does it matter who is lending the money?

Asked by Patricia, Portland, OR Tue Aug 17, 2010

Right now we found a good refinance deal through a friend of the family that works for a big company ... only problem is that I've found several customer service complaints online about that big company. How much does that matter? We have not consulted with a mortgage broker yet, but my concern is ... won't the mortgage eventually be transferred to a big bank ... do I have any control of who ultimately ends up my our mortgage? Again, how much does it matter?

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Mark Aalto’s answer
Mark Aalto, Mortgage Broker Or Lender, Portland, OR
Tue Aug 17, 2010
Thanks for the clarification. In this day and age it's really impossible to know who the loan will be transferred when all is said and done. Just as an example, for years Washington Mutual was a NW S&L that serviced all of its loans. When the financial meltdown happened Chase bought them out. I think we'll continue to see things like that happen too.

Basically none of us have control over who ultimately services our loans. I have three currently and each has changed hands at least two times. Two are currently with Bank of America and one is with Citi. Customer service is always tough on the servicing end - most staffs seem to be overwhelmed with call volume and/or lacking in knowledge.

I'm not sure if I have truly answered your question to your satisfaction but over the last 20 years I have offered to do conference calls with my customers to help with servicing issues. One other tidbit of information - most companies that outsource servicing to other countries will allow you to request to speak with someone from the US when you are on the phone with them. I know it's a small bit of help but hopefully it will be of some suport.

Inevitably most of the servicing of loans is going to be done by a few very large institutions. I don't like it either.
1 vote
Lana Lavenba…, Agent, Grants Pass, OR
Tue Aug 17, 2010
I think Mark hit a lot of the high lights for your question. I dont know that who you work with to get the loan will matter in the long run - it will matter who you make your payment to. Not only the best interest rate, but the cost of getting the loan and cost over the time frame of the total loan. Those are the items I would look at. I hope you get the loan that works best for you!
0 votes
Scott Wynn, Mortgage Broker Or Lender, Brighton, CO
Tue Aug 17, 2010
Whoever you pay your mortgage to really should not matter. I know that some people really don't like certain banks or mortgage companies and prefer to not have their business with those banks they dislike. The problem is that the loan officer and mortgage company you do business with likely has little influence on who you will make your payments to over the life of your loan. It is very common that the mortgage company collecting your payments will change. The good thing is that the terms of your loan (rate, length of your loan, etc) can not change when the servicing is changed. All this is changed is who you make the payments to.
0 votes
James Adair, , Portland, OR
Tue Aug 17, 2010
Ultimately no mortgage originator can promise who will be servicing your loan. Every servicer reserves the right to transfer servicing at any time, some more likely to do this than others. But the terms of the original mortgage can never change. Most loan servicing companies will offer VERY similar tools: website account access, online payments, auto withdraw, etc etc.

Some have better customer service than others, but none are perfect. Getting the right rate and term.... delivery and overall advice is far more important and impactful to you than who ends up servicing the loan.
Web Reference:  http://www.pdxhomeloan.com
0 votes
Patricia, , Portland, OR
Tue Aug 17, 2010
Thanks Mark. Just to clarify, our contact is no doubt a great person to be working with ... but I'm just a little concerned that what if in the future he leaves the company and we need assistance with our loan? Does it matter that the company itself may not have a great track record of customer service?
0 votes
Mark Aalto, Mortgage Broker Or Lender, Portland, OR
Tue Aug 17, 2010
I would recommend getting references for whomever you are working with. Rates and terms are really important but making sure that the person you are working with is competent and reputable is equally important.

Also, I'd ask how long it takes to close transactions and whether the rate can be locked for a long enough period to honor the initial terms offered.
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