We're possibly buying a house soon, near Cleveland. Can anyone give me tips or recommendations on finding the best lender? I know some banks/credit unions have programs similar to the VA loan - I've already used mine but I know Navy Fed has an equivalent, for example.
edit: I meant bank. For some reason I put band in the title. Whoops.
I've used Pentagon Federal Credit Union numerous times over the last decade+, and it was always an excellent experience. They used to have a fantastic 5/5 ARM with zero closing costs (a credit against CCs essentially), but have slimmed down to fixed rate mortgages now. Even at that, their current rates are pretty darned good. They're at 2.75% for a 30yr, and 2.125% (wow!) on a 15yr conventional.
They also don't sell off their loans - they service them in-house.
I have not had a mortgage with PenFed, but have had multiple car loans, and likewise received excellent service. It's worth a call.
My current house refinance was done through Northpointe Bank, and went smoothly.
More than a specific lender though, is to review the WHOLE package. Because rates, fees, and other costs change a fair bit over time, and certainly between lenders. Origination fees, closing costs, and the individual service fees (appraisal, title search, etc.). Make sure you're comparing the total costs involved. In my case, despite the rates from both lenders being ~2.5% last year, one was $4000 cheaper once you netted everything out. Good Faith Estimates (GFE) can ballpark this if you're looking at lots of lenders, but when I got down to the last two, I asked for a HUD from each.
I have had a mortgage with PenFed for 8 years.
If I had to do one now I would likely tell them to go get berkeleyed. The mortgage department is nearly impossible to communicate with once you have one. I needed to update my escrow docs because I switched insurance and it was a nightmare. Even if I called before they opened, the instant it became 9:00 CST there was a multiple hour hold time. I finally was able to get a response from their very goofy web interface, but it took about 2 weeks for that to happen and there was no notification - I had to just keep coming back and checking.
Agree 100% with ProDarwin.
I have been a Penfed customer since 1999 on many things. I will NEVER give them the mortgage business. They the worst customer service in the world. STAY AWAY
When we bought the place in WV we used Penfed and things went smoothly. The refi last year dragged out into this year and was a mess, even taking into account the pandemic. Not sure if I'd do another refi with them at this point.
BoxheadTim said:When we bought the place in WV we used Penfed and things went smoothly. The refi last year dragged out into this year and was a mess, even taking into account the pandemic. Not sure if I'd do another refi with them at this point.
I've had an account with them since ~2000 or '01. Its mostly been smooth. The buying process in '13 was smooth. This last year has been a mess. Wonder if there was a big internal change.
If BBT (local bank for me) can get me any reasonably similar rates I'll just go with them on stuff in the future. There is something to be said for a place you can walk into and talk to someone face to face.
Not sure that helps RE: mortgages though.
My only relevant advice would be: don't buy a house!
I'll see myself out.
Bankrate is always the first place I go to get benchmark rates, potential lenders, and rate trends when mortgage/refi shopping.
I used a local broker when I bought my house in Sept 2017, and used him again last year for my refi.
Even with the pandemic in full swing last summer, my refi was completed in 3.5 weeks, with no fuss.
2.75% is a pretty incredible rate! I'm glad to hear about the difficult customer service though. It's good to get the full picture. I'm definitely going to spend my due diligence and shop around and see who has the lowest rates and fees (thanks for the advice on checking fees as well.) If I remember correctly, when I bought my last house (2016) I just went with whoever the realtor recommended and wound up with someone that then sold the mortgage to Freedom Mortgage. Overall it wasn't a bad experience. I did use my VA loan though. As I mentioned earlier, I've seen some banks/credit unions that have an equivalent - NFCU has a loan that is effectively similar to a VA loan, without actually being one. I'd like to pursue deals like that if I can find them, and the current interest rates are still very favorable.
infinitenexus said:...and wound up with someone that then sold the mortgage...
With few exceptions, this is likely to happen almost regardless of who you start with. As many times as has happened to me, it isn't something I would even give a second thought to at this point. They can't change any terms of the mortgage contract, so the only thing that changes is that you may have to set up a new automatic payment recipient once every few years.
I've been a mortgage lender for 37 years. I've been a Broker/Banker and a Bank. YOU ALWAYS WANT A MORTGAGE BROKER unless you are doing a Super Jumbo loan.
When we had the Super Majority a few years back the big bank lobby got some things made into law that ensure they will be able to charge you more, much more. You will find that a Bank/Credit Union will have $4,000-$7,000 more closing costs than a Broker. They are allowed to pad fees and make up fees, plus most have policies that require an Origination fee always (1% of the loan amount) and many also charge points, both of those at the same or slightly higher rate than a Mortgage Broker.
When you get your LE (Loan Estimate) look in the very first box on the upper right hand of the first page (Box A), if you see ANY FEES AT ALL IN THAT BOX you are paying too much. Regardless you might see a small fee or 2 in that box when you get to closing due to the way Title Companies/Attorneys break fees out.
As bad as all that is, the big online lender has a standard 2 point minimum (2% of the loan amount). They might come off of that for a price match, but do you really want to work with someone who has already proven they will try to screw you? (Plus the service and close times are terrible)
Mortgages are one thing that doesn't really work well on the internet, that is unless you want a quick turn down.
I am on many nationwide mortgage forums and what I've told you are national norms. In some areas it's WORSE!!
In reply to carguy123 :
Thank you. That's a lot of stuff I didn't know about. That's excellent advice!
carguy123 said:They might come off of that for a price match, but do you really want to work with someone who has already proven they will try to screw you?
This is why I start with Bankrate. Easy to get competitive rates, with fees* listed. For me, the other brokers I contact typically come in noticeably higher. It's not until after mentioning I already have found better elsewhere that they ask for proof so that they can "see what they can do" to match it. No thanks, I'll just go with someone that doesn't make me jump through hoops to get the best rate.
.
* Note: If you hover your mouse over the "Upfront Cost" of each offer, all will at least show the basic Points, Origination Fee, Processing Fee, and Underwriting Fee... Even if they're all zero. Some will show Lender Credits that are used to offset (or even zero out) their Origination Fee, while others will basically show the net Origination Fee and you'll see how they use the Lender Credits to offset it down to the net number once you get deeper into the process. Additionally, some will also show "Other Fees" like Apprisal, Title Settlement, Title Insurance, Credit Report, etc. Keep in mind that these are being even more transparent, to the detriment of the appearance of their offer, as the other lenders will all have these fees as well. You just won't see them until you get deeper into the process. So apples-apples in between the two in that initial look, means taking the "Other Fees" out of one or adding them to the other for the sake of comparison.
Refinanced our 30-year to 2.875% with Northpointe Bank last year, but they already held our previous mortgage.
My only complaint was the never-ending submission of paperwork. Even after qualifying I had to answer all kinds of questions about my income (self-employed), my assets, ALL my financial accounts, tax payment history, on and on. All to prove I was capable of making a LOWER monthly payment than I was already making. I can't tell you WHAT paperwork to have ready, but go ahead and have online access to every financial thing you touch. Printing out PDFs is so much easier than asking some paper pusher to email you something.
The good news is that google and the VA's website tells me that with some paperwork I can use my VA loan a second time. That'll be a huge help, as I won't need private mortgage insurance or a downpayment, and my interest rate will be very low. We checked a house yesterday and found the first floor to our liking but the second floor was kinda stuffed under the roof, so to speak. The ceilings were about 6 feet tall at the highest point. Definitely a deal-breaker. No rush though, our slow search continues.
I don't know how much of a data point this is, but my local mortgage shop that the broker set us up with sold my mortgage to PennyMac before I even had a chance to make a payment to them. I was prepared to be upset, but I gotta say, for the past 9 years or so they've really been stellar the 3 or 4 times I called them. I don't think I was ever on hold longer than 5 minutes, and they've been great about digging into my questions about whether things were paid properly, etc.
According to their website, this is the current rates:
So, your mileage may vary, but there's an anecdata point.
Terrible to hear about the challenges with PenFed. We last did a mortgage with them in 2018. It was super easy and comms were good. Hopefully they can turn it around. We've had three mortgages through them (and one re-fi) and at least three car loans.
I find it interesting that the realtor I've been speaking with gave a heavy frown at the mention of navy federal credit union (who I used 15 years ago and never had any problems with, and currently offers 2.125% for a 30 year VA loan) and he said they were problematic and just horrible, and of course he has a lender that he very highly recommends (cross country mortgage). I'm guessing he gets a small kickback for bringing them business. I believe last time I went with the recommendation of my realtor. This time I'm going to shop around and find the lowest interest rate and fees.
ProDarwin said:BoxheadTim said:When we bought the place in WV we used Penfed and things went smoothly. The refi last year dragged out into this year and was a mess, even taking into account the pandemic. Not sure if I'd do another refi with them at this point.
I've had an account with them since ~2000 or '01. Its mostly been smooth. The buying process in '13 was smooth. This last year has been a mess. Wonder if there was a big internal change.
I think they had some issues with the transition to working from home. And of course my refi fell right into that period.
Sometimes it's not about the kickback (even if there is one) sometimes it's because they now the appraisers that the mortgage company uses will always appraise high so that a deal goes through and an offer doesn't need to be resubmitted. Other times it's about the approval process and either the ease or speed of. But there is also the familiarity of a working relationship and yes a kickback.
I had a friend who was looking at a property in January February of this year and was under contract. Their buyer's agent was terrible, which really was an excusable as we have a mutual friend who is an agent, but they just clicked the link to have a random redfin agent show them the property. The long and the short of it is, he was pre-approved for the dollar amount to purchase the home that had his dream garage of 2100sq ft, lifts, full bathroom, lofted game room and parts storage, no HOA. But when the appraisal came in it came in below the accepted offer price, because the appraiser wasn't sure if the garage was residential or commercial. It was residential it was owned for residential no business had been or would be done out of it. His buying agent should have gone to the county land records office and pulled the zoning and gotten the deal pushed through as previously agreed upon. But they couldn't be bothered to. He resubmitted an offer at a lower value It shockingly got accepted then he had to get it reappraised again (we're going on 90 days into the process at this point) of course he wanted a new appraisal company because the previous one had pissed him off, and their appraisal came in even lower because they wouldn't even take into consideration the fact that there was a garage. At that point the seller and selling agent told him to pound sand.
He ended up spending $90,000 more than the initial offer for property with an HOA and a detached garage about a third of the size, but there's not even a driveway that goes to the detached garage that he currently has It's strictly for long and garden equipment by design.
So I guess the long-winded moral is, definitely shop around and make sure that you're getting a good in fair deal for yourself. But if there is a hiccup and you have a good buyer's agent and they have people whom they recommend and the house is the absolute house that you want to spend the next 10 plus years in. Defer to plan B being your buyer's agent's plan if you really want to make sure that you don't miss out on the house and it fits your needs.
(If it's a house that works but it's not a dream house and you plan on moving out as soon as you get some equity in it, then don't worry as much about the plan B)
In reply to infinitenexus :
Yeah, it's kinda funny why lot of lenders that aren't represented by a realtor's buddy are "problematic", isn't it?
And yes, I would expect they get a referral fee, which I think is fair enough. One thing I would consider though is the level of service - knocking off 0.125% off a loan and having a bad time dealing with the lender five minutes before closing is going to be extra stressful.
I called Navy Federal Credit Union and asked them a few questions about the mortgage process and fees and whatnot. The pre-approval lasts for 90 days, so I'm going to wait until I have more saved to even consider getting pre-approved. When I apply they'll submit the paperwork to get the certificate of eligibility from the VA, which *should* still allow me to use what's left of my VA loan. Base rate for the 30 year VA loan is 2.5%, and for a $150K loan (which is roughly what I'll probably be getting) it can be bought down to 2.125% for about 3 grand. Now that I have some good info from them, and know a bit more so I can ask more questions (thanks to all of you!) I can keep calling around to different places until I find the best deal.
Be sure to have another $6k for closing cost, inspections, reinspections and notaries in addition to the down payment.
I ended up using my current bank. In the end I think I spent about $150 more on closing compared to the best deal I found (which was a credit union), but setting up an auto transfer from one account to the mortgage account was dirt simple. They also offered a no-fault thing which I don't really need. It basically sets it up as an email reminder instead of a late fee. If I were to forget to pay, instead of sending me a late fee they check my balances. If the money is there to cover it, they do the nice thing and remind me instead of assuming I defaulted. Like I said, I'll never need it. My mortgage is about 1/10th of my modest income and it's set up for an auto payment every month, but it's a nice touch in case my situation changes in the future.
Keep in mind that where ever you get your mortgage, there is a good chance it won't stay there. Mortgages are commodities to banks. They are constantly selling/buying liabilities and assets. I thought for sure my tiny little loan was going straight for Fannie Mae or Freddie Mac, but surprisingly they kept it in-house. I think that may be a benefit of small banks. When they get a loan with a good credit score, they may as well take the long road and hang on to it.
Edit to add... if it does get sold off, the terms don't change, it just changes where you send the check. In my case, if my bank sells the loan I still make payments to them and they pay the owner of the debt. That was another perk of keeping multiple accounts with my bank. Kind of a concierge service. If they sell the loan, my no-fault still stays. The bank pays the loan regardless of whether or not I transfer the money. They just send me a reminder. I'm still on the hook for the dough, but they give me three months grace in which they still pay the loan. Kind of a "hard times" insurance.
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