Help/advice: Online 30 yr. rates amazing, are they for real?

cooljw · Joined: 18 Nov 2005 Posts: 1

Are the jaw-dropping low rates I see online from no-name lenders for real?

I'm buying a new home from the builder and looking for a 30 yr. fixed mortgage at the max. conforming loan size (either ~$400k - the 2006 limit or $359,650 - the current limit. Some lenders will already do $400k conforming.) I'm in San Diego.

This should be a low risk loan for any lender:
- 40% Loan-to-value
- Wife and I have excellent credit and income levels

Builder will pay $5k towards closing costs with some big-name institutions that quote me:
- 6.25% with .50 point or 6.125% with 1 point (typical closing costs, no origination fee)

I go online to a site like Bankrate.com and see:
- 5.5%-6.0% with no points!

So even factoring in the $5k I get from the builder, the rates from named-brand lenders are not compelling!

Can this be? Is it simply a bait and switch tactic by the online little guys? I am very wary of the "if it looks to good to be true..." mantra.

chow · Posted: Fri Nov 18, 2005 8:53 pm Post subject:

YEP- MANTRA: it is an abused word, and really a deep understanding of SELF WORTH, and relationships with People-rather than material objects or money.

You really didn't want to use the word or refer to Mandra-did you?

I thought you were seeking Monitary Guidence-

-ooooommmmmm! :wink:

If they will lock, and send you lock form-

then
:wink:

Lock and Load! Get a GFE and a TIL along with it.

You know what you want? If you seek-you will find.

You may not find the loan you want- after you sell yourself to the devil.

I tend to make people think. :wink:

Lendgo · Joined: 30 Nov 2005 Posts: 14 Location: California

I have been advertising in the online world for quite some time now, most of what you see online is true, but let me stress that not all. These days mortgage is a highy competive field and people are looking for new techiques to get people on the phone. Most of those ads you see are mortgage brokers that will advertise a rate that they can do at cost...and try to get a point or two out of you when they pitch you the loan. "Bait and Switch".

What I would do is be firm and demand for the rate. The company knows that they can be slaped with a lawsuit if they do not live up to the advertising claims. Or just as bad, the website where they advertise on can stop letting them advertise.....which can be even worse. Use these as negotiating tactics for leverage.

Some of the rates I see on Bankrate are rock bottom rates that are possible, but the originator will not be making any money on them. If you push and dont let them give you give you $@#$^. You can force them to give you that rate, just be persistent.

Moreover, I have found that the best way to get a good deal on a loan is to shop, shop, shop. Compare, compare, compare and let the mortgage companies compete for your business until you have a rock bottom rate. Let them fight over you as opposed to you pushing them for a good rate.

This can be a hell of a process but there are a number of services that will analyze your needs and find you four of the best lenders that fit your profile. The nice thing about these services is that the lenders know that they are competing against 3 other lenders and they would not mess around with you as much.

cheers