Shopping Around for a Mortgage

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

For a consumer, would you advise shopping around for the best price? Do all lenders offer basically the same plans? Or is there a big difference between different lenders?

Nikko · Joined: 20 Jan 2005 Posts: 536 Location: Northern CA

I think that we all have access to pretty much every program out there. I think that it really matters not the lender that you choose in terms of the money. I think what we are really selling is ourselves.

Personally, my rate is $350 a pop.

Nikko · Joined: 20 Jan 2005 Posts: 536 Location: Northern CA

The other problem with shopping around, and people do not realize this, is that the inquiries on credit really add up quickly, and it doesn't take much to drop your credit score below a usable number. I say that if you are pleased with the first guy that you speak to, and the rate is close to those that you see advertised in your own bank, go ahead and do it.

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

I figured it was about the same. So either you like them as a person or not, but overall they have about the same product, plus or minus $50 in fees?

Nikko · Joined: 20 Jan 2005 Posts: 536 Location: Northern CA

That's really about it. Just like when I sold cars. You make a friend, you get the sale.

Gray Goose · Joined: 25 Jan 2005 Posts: 32 Location: Edmond, OK

No, that's not at all correct.

Broker's fees vary by thousands of dollars depending on need or greed. Interest rates can vary 1, 2, 3 percent.

For example, today I saw a good faith estimate from the competition.
Total closing costs, excluding prepaid taxes and insurance were $4,200.
Interest rate was 6.75% fixed.

My company's closing costs were $1,724
My interest rate is 5.5%

Same borrower, same credit score, same loan amount and property. My company will show a $3,850 gross profit.

Is the competitor greedy? Or could it be the competitor lacks experience (90%)? Were they quoting their sub-prime rates to a conforming borrower ? Probably.

All that said. I hate shoppers. And Nikko is right, to a certain extent. If they like you, you will do business (even if you screw them). We make a fair profit and sleep well.

Gray Goose · Joined: 25 Jan 2005 Posts: 32 Location: Edmond, OK

And...

63% of our business is referrals.

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

I hope when it is time for me to buy later this year that you guys will help me decide. Yet I hope I won't be one of those shoppers you hate either. :)