First time buyer mortgage shopping

One of my kids is looking at houses. What is everyone seeing as the best options for mortgage lenders? I am assuming some of the nationwide online options could be more competitive than locals. This would be in CA.

If they belong to a credit union, I would check the rates there.

It might be worth joining a credit union!

We got a small %age less on our mortgage rate because we had direct deposit for our pay checks. They should check their bank too.

Our first mortgages were through a mortgage place, but we found after that our credit union and bank offered the same or better and we had less closing fees because we were customers.

I would check local credit unions. Even though I am a consumer real estate underwriter at a local bank, I am about to apply through a credit union to refinance my mortgage.

Our credit union is the best! Lowest rates and other perks, like waiving the appraisal fee.

The national banks may be more competitive with rates, but speaking as someone who helps close real estate transactions, the local banks are 100X easier to work with. I absolutely hate hearing a client has chosen a nationwide online option. Or even a local branch of a huge bank. Recently, a client’s mortgage wasn’t released properly. Lending branch wouldn’t help, just referred us to a toll free number.

That said, mine is at a national bank because back in 2001 we didn’t have the money for a standard down payment. Sometimes the big banks come in handy, but I would definitely have them look into smaller ones.

One of my sons bought a house in CA recently and went through Stanford FCU. Was easy and he was able to contact the mortgage processor pretty easily. Wells Fargo had a significantly lower rate, but S didn’t trust them.

We are credit union members, but in 1993 we opted to go with a national bank recommended by the realtor. (He took care of a lot of the work, including checking the paperwork prior week… good thing, since bank had not credited us with pre-paid point for rate lock-in). It was a pain when the mortgage got sold to another national bank once or twice. Same thing happened to our refinanced mortgage.

Yes, it is quite common for the mortgage servicing to be sold or transferred to a different lender.

In addition, behind the scenes, the investor in the mortgage may change as mortgages become part of mortgage backed securities. The mortgage servicer that you send the payment to is not necessarily the investor.

20% downpayment is typically the amount needed to avoid additional costs of private mortgage insurance and being required to have an impound or escrow account for property taxes and house insurance.

My D bought a house several years ago in Ca and they went with who the realtor recommended. It was Caliber which is national but had a local agent. They are now hoping to move and are working with Caliber again but with a different agent.
We have bought multiple properties in Ca and have gotten good rates with a local bank and also with a local mortgage broker.
Good luck to them with the house hunt.

We have bought 6 homes and refinanced many times. In my experience (and I shop around a lot), the local credit unions can’t compete with national online lender. Not even close.

For the last few purchases or refis, we used a Costco lender. We are refinancing right now. Closing on 10/6. 2.625% for 30 year loan. No local bank quoted me less than 3%. I just checked advertised purchase rates on an average house for our area with our local credit union. They are boasting 3.25%. Same loan on Costco is 2.75% right now (450K house, 30 year fixed, 10% down, SFH, high credit score).

We have had very good experience with Costco lenders. There is a flat $350 lender fee with 0 points on all their loans and they’ve always closed on time or early.

The standard lender line of “We will never sell your loan” is meaningless to me. I don’t care who services my loan. I set up automatic payments, and the servicing is always seamless for us. We sold a rental home last summer and the mortgage for that was sold 4 times during the time we held the loan. I never had to do anything other than create a new password for the new lender online account, and I wouldn’t have even had to do that if I was OK with the paper statement. The difference in cost between the Costco loan above and the credit union loan is $27000, plus additional closing costs from the CU. I can change my account number a few times over the years to save $30K.

I also learned long ago that mortgage quotes are negotiable and I’ve always negotiated down the rate and/or fees. Even 1/8 pt saves a lot of money.

^I meant I could change my account password a few times over the years…

Sounds like Costco is a good place to look for a loan. I never knew that.

Make sure that your kids know that rates and fees are negotiable. Ask that EVERY FEE be revealed to them upfront. Some of them are garbage fees such as ‘document processing’. For heavens sake, document processing is part of getting a loan.

I used the same mortgage company to purchase my current house and to refinance recently (just closed). Lowest rate around offered, they always seem to have some deal going on so that the fees are very low, and the process is very smooth from start to finish. Guaranteed Rate, if you’re interested. 2.375% on a 10 year refinance, waived appraisal and survey, 0 lender fees.