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Hazy Arc

join:2006-04-10
Greenwood, SC
Reviews:
·CenturyLink
·Embarq Now Centu..

Purchasing a New House - Mortgage Question

Hi All:

We're in the process of finalizing the sale of our current home and are currently looking at our next home.

We currently do all of our banking with a local, community-bound bank with which we're extremely happy with. I'd like to give them the opportunity to hold our new mortgage as it would make things easier in the long run, but wanted to get some advice first.

When buying a house, how exactly do you "shop around" for the best deal on a mortgage?


SychoSly
Scoot the World
Premium
join:2004-01-22
Mount Prospect, IL
kudos:1
I have friends within the business so I go to them who could give me the best interest rates along with the lowest closing costs.
--
~Sly


Cabal
Premium
join:2007-01-21
Reviews:
·Suddenlink
reply to Hazy Arc
Most banks and credit unions are pretty vociferous about their rates on their web sites. Get pre-approved at a couple that look the most promising, and play them off of each other where you can.
--
If you can't open it, you don't own it.


hitachi369
Embrace Your Rights
Premium
join:2001-10-03
Grand Rapids, MI
kudos:4
reply to Hazy Arc
You may want to check with them too to see if they will even keep your loan. My local credit union told me that they were going to sell it after it booked, unless you get a good rate, there may not be a reason to go with them if your goal is for them to hold it.


runnoft
Premium
join:2003-10-14
Nags Head, NC
kudos:1
said by hitachi369:

You may want to check with them too to see if they will even keep your loan. My local credit union told me that they were going to sell it after it booked, unless you get a good rate, there may not be a reason to go with them if your goal is for them to hold it.

Yes, HazyArc, I don't know if this still goes on after the rate crash, but the last time we got a mortgage pre-2007, it was happening to home borrowers more often than not. A new mortgage often gets sold to another financial institution within the first two or three years of the mortgage, and it may get sold multiple times to multiple financial institutions over the life of the loan. If this happens to you, you have to start making payment arrangements with the new holder of your mortgage, and it may be an institution far away from you and may be a lot less convenient. Loyalty can be a one-way street as far as these guys are concerned.


CylonRed
Premium,MVM
join:2000-07-06
Bloom County
You may not have to change who you pay - I have had mortages be sold and most still paid the original lender. Including the refi we did last year with our CU. IT was sold (as they told us it would be) but they still serviced the loan and we still paid the CU.
--
Brian

"It drops into your stomach like a Abrams's tank.... driven by Rosanne Barr..." A. Bourdain


JustBurnt

@rr.com
reply to Hazy Arc
One thing not mentioned, whomever you go with for the mortgage, make sure you read it ALL, if there is ANYTHING you do not understand have them explain it or hire a lawyer to read it and explain it to you, many people were victims of mortgage scams which contributed to the economic disaster.

Yeah, a lot of the mortgagers were complicit in the "funny" mortgages.

A $250,000 mortgage for $500/mo with nothing down .. yeah right.

Many mortgages are unusually low for a reason which may take you 15 years to discover when you lose the house to foreclosure.
Expand your moderator at work

Bob4
Account deleted

join:2012-07-22
New Jersey
Reviews:
·Optimum Online
reply to runnoft

Re: Purchasing a New House - Mortgage Question

said by runnoft:

A new mortgage often gets sold to another financial institution within the first two or three years of the mortgage,

My mortgage got sold twice before I made the first payment!

This is really only a problem if your bank gave you lower checking/savings fees for having a "relationship" minimum balance, and now your mortgage doesn't count towards that anymore.

mocycler
Premium
join:2001-01-22
kudos:1
reply to Hazy Arc
Don't use the lowest rate as the sole measuring stick. Make sure you understand all the fees and other junk that goes with it. Also consider service: Can you easily contact them or is everything done on line and you're never sure where you stand?

Also, that cute little local bank you love so much will probably bulk sell your mortgage to someone else. The terms of the deal will still be the same but if there are any problems you will not be dealing with the new lender.

I refinanced my house last spring. I went with the local bank that I've had a checking account with since I was a kid. Overall, I could have saved a few hundred bucks in fees by going elsewhere. I stuck with these guys because they contractually must service my loan themselves (can't sell it off) and if I have a question or problem I can walk into the local branch and talk face to face with the same person every time. She knows me by name and I don't have to explain the same thing over and over. That kind of relationship is worth paying a little more for.


runnoft
Premium
join:2003-10-14
Nags Head, NC
kudos:1
reply to Hazy Arc
Given the discussion in the thread, maybe you can get them to agree in writing when you apply for the loan to continue to service your loan even if they sell it off. That was not something I asked for with my most recent mortgage at my local bank, and my loan did get sold twice, and each time I had to make new payment arrangements with the new financial institution. (I doubt you can get them to agree to never sell off the loan, period, unless you have an unconventional loan that would be difficult to resell or unless they offer that as a matter of policy to all their customers. Banks make a lot of money writing loans and reselling them.)


JustBurnt

@rr.com
reply to mocycler
said by mocycler:

Don't use the lowest rate as the sole measuring stick. Make sure you understand all the fees and other junk that goes with it.

I worked in Purchasing for many years and I can say the lowest price is rarely the "best" price.