I'm comparing multiple mortgage lenders - 1 banker in Hoboken, others with better rates but not as local - is it worth the higher rates?

Asked by NittanyLion, Hoboken, NJ Sat Oct 20, 2012

The local Hoboken based banker, as well as my realtor, have pointed out that it's worth considering a local mortgage lender as they are more familiar with the idiosyncrasies of the area. But, I have more competitive rates and/or fees from other lenders, one national bank with a rep in Paramus, another broker in Princeton area, and a broker out of Langhorne PA but all say they have worked with Hoboken buyers. Is it worth paying a quarter or an eighth higher interest rate to use a local mortgage lender? Flood zones, ratio of owner occupied vs rented units, etc, that banks consider, may be of concern? Can I apply with more than one in case one doesn't work out? Thanks!!

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11
Cissy Isaac, Agent, Hoboken, NJ
Sun Oct 21, 2012
BEST ANSWER
I've personally had a few instances that may or may not apply to you. One had to do with an appraisal. The home was undervalued because the (non Hoboken) lender used an appraisal company outside of their area of expertise; which ended in a renegotiation of the purchase price and a seller unwilling to bend. Another example was confusion on a specific building and the building's insurance structure. This building is actually two separate buildings under the same name and closing was delayed three weeks while the underwriters tried to figure out whether or not the buildings had the correct amount of coverage, again - an out of town lender and a local one would have been ready for these types of questions.
However, I have also had many positive experiences with out of the area lenders; and since you are this far along in the process, you should be OK which ever way you decide to go.
1 vote
Karina Abad, Agent, Basking Ridge, NJ
Sat Oct 20, 2012
Hi Nittany keep in mind that the rates you are quoted are not final and will be based upon when you actually apply and your credit.
I personally always strongly recommend my buyers use a local rep with a good reputation. It is critical for the success of the transaction due to the nuances of appraisals in our fast paced market and condo building eligibility. Not only that but it would help the chances of your offer being accepted in this highly competitive market. Selling agents don't like to work with buyers that have prequel letters from banks that are out of town or national lenders unless they have had a personal experience with them.
The most commonly used mortgage vendors used in our area are Pinnacle, Investor Mortgage, Wells Fargo and NJ lenders.
Hope that helps!
1 vote
Jose Martinez, Agent, Hoboken, NJ
Thu Aug 15, 2013
Call me I can help. I have been in the Mortgage business for 16 yrs, and a local Mortgage Banker that closes on time.



Jose Martinez
Sr. Mortgage Consultant
201-406-6983
NMLS 307342
0 votes
Kathleen Con…, Agent, Hoboken, NJ
Sat Apr 27, 2013
Hi, My clients have told me many time that ~ the more They shop the better rates they get because they understand the process more clearly. Take some time with this process and you will be able to make a better decision. Good luck!
0 votes
Jose Martinez, Agent, Hoboken, NJ
Sun Apr 14, 2013
Call me I can help. I have been in the Mortgage business for 16 yrs, and a local Mortgage Banker that closes on time.



Jose Martinez
Sr. Mortgage Consultant
201-406-6983
NMLS 307342
0 votes
Rich Homer, Agent, NAPLES, FL
Sun Jan 27, 2013
Best next action is to ask a local Mortgage Broker by clicking "Find a Pro" in the main menu at the top of this website. http://www.naplesrealestateguys.com/
0 votes
Ruth Bonapace, , 07030
Fri Jan 25, 2013
There should no reason why you can't have both a great rate and superior service from a local lender. I have 16 years of experience financing Hoboken properties and I work for Wells Fargo Mortgage -- a national lender with a mortgage office right in Hoboken and my buyers shop around but back again and again. You don't want something to go wrong right before closing and find your loan officer has gone awol. A local rep can't and won't hide otherwise they won't stay in business.
Ruth Bonapace
(201) 741-5269
0 votes
Biff55645, Home Owner, Jersey City, NJ
Fri Nov 16, 2012
I bought a place in hoboken right after hurricane Sandy and our out of town broker was fine. The rate was indeed more competitive than the local guys and I felt we got plenty of personal service with regard to rate locking, paperwork assistance, and speed of response with pre-approval letters. I don't think the broker had ever done a hoboken deal before.

I didn't think the broker had any control whatsoever over which appraisal firm the bank will use to evaluate the property. My impression is that they are all "out of town". And if the comps are there, the place will probably appraise just fine.

And yes, you are free to apply for as many mortgages are you like as long as you are willing to pay the appraisal fees. If one bank is stalling, then try again with another.

One think I can't recommend enough, however, is a hoboken lawyer. Had I used a random out of town lawyer, I know the deal would have busted.
0 votes
, ,
Mon Oct 22, 2012
Hi what are you comparing too. What rate would youlike to have. First Prestige Mortgage will tell you.
The Real Deal call 973-744-8300
0 votes
NittanyLion, Home Owner, Hoboken, NJ
Sun Oct 21, 2012
Cissy and Karina, thank you for your insightful responses - I appreciate it! I am about to be through with attorney review so my offer has already been accepted, it is just a matter of committing to one lender, and sending through my official application. I have already had fairly in-depth conversations with all the lenders, but I'm not sure how to predict how the non-local lenders will react if any "issues" arise during the underwriting.

I know anything is possible but my personal finances likely shouldn't be an issue - zero debt currently, solid income history, high down payment %, but I'm more concerned about the nuances of Hoboken town homes that may work against my application. Have any of your clients ever used non-local mortgage lenders who did not approve loans due to issues that you believe a local lender would have been more understanding of? i.e. flood zones, high % of rented vs owned units, anything else that is very Hoboken specific? Of all clients who use non-local lenders (I'm talking brokers/banks/bankers based out of central/south NJ or northern PA, nothing "far", and not a purely "online" bank), how often does this actually happen? Cissy's example below is actually fairly accurate, so I am looking at pretty considerable savings here.

Thank you all so much for your help!
0 votes
Cissy Isaac, Agent, Hoboken, NJ
Sat Oct 20, 2012
A loan for 500K at 3.25% will cost you around $2176 for your monthly payment before property taxes and maintenance fees. That same loan at 3.50% will cost you around $2,245 for your monthly payment. A difference of $70 or $840 per year. If you stay in your home for 5 years, that is an additional cost of $4200.
Local mortgage lenders, because of their familiarity with the Hoboken landscape can let you know whether or not your purchase will meet the Fannie Mae standards before you incur the costs of a loan application and appraisal. They also use local appraisers that are more familiar with the area and know what amenities like a terrace or parking are truly worth.
It can also help in getting your offer accepted to use a local lender.
I wouldn't apply to more than one mortgage company, because in the end, most have the same institutions available to them. Rather, I would ask the individual mortgage brokers what institutions they use and why.
Hope this helps,
Cissy
0 votes
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