Do different agency lenders have different pricing?

Question

Do different agency lenders have different spreads and interest rates? Or if I go to one Fannie agency lender and they quote me 5.5%, will another Fannie agency lender quote me the same thing or do they have different spreads?  Just want to figure out if agency debt is based off of the agency or the lender specific spread.

Jacob Sherman · Answer

5.5% seems very short in todays market . how many points ?

Dave Skow · Answer

@Lou Bar- thanks ...all lenders should be in the same ballpark  with pricing options  BUT .....they  will likely also vary ....best thing to do if needing a loan is to contact several lenders on the same day / use the same  criteia /  get  quotes for the scenario and  then make a decsion on using  one for the loan or the  pre approval ...also keep in mind that loan pricing  changes daily

Nick Belsky · Answer

@Lou Bar

Picture thousands of lenders all selling the same product with the same base guidelines.  That is what you are up against in agency/govey loan programs.

Cheers!

Brittany Minocchi · Answer

Rates and terms will vary from lender to lender. Also worth noting that rate isn't as important as people make it out to be. To clarify, I'm not talking about one lender giving you 5.5% and the next giving you 7.5%, I mean switching lenders over something like 0.125%. That lower rate might cost you more in up front fees, you might get crappy communication from the lender, slow or incompetent underwriting, or something that ultimately causes you to lose time, money and/or the deal altogether.

Erik Estrada · Answer

You can shop for the cheapest and lowest rate. Will it be the best option? No way.

Most lenders that offer nice looking terms are just that, nice looking. Will they fit your scenario? Probably not.

There are pricing adjustments for every little thing that many investors fail to consider. FICO, LTV, DTI, DSCR, reserves, first time buyer, and many more. Lender's will price your loan according to your qualifications.

Yes you may get a few outliers that are a .25% better here and there, but what is that truly saving you?

It's best to work with a reputable broker or lender that will get your deal funded, hassle free. Work on getting more deals and not the nuances of lending.

Jon Puente · Answer

Hey Lou,

Lenders have different spreads on loans.  You can price out the same exact scenario with 100+ lenders, and each one will have their margins.  I am a broker and literally shop people and see who is more aggressive (or not as aggressive) based on the situation.

Ko Kashiwagi · Answer

Hi Lou,

Different lenders have different rates for many reasons. Even for just one type of loan, each lender has can have their own index and spread. A broker will also shop different lenders for you, and different brokers have varying access/relationship with their partnering lenders. If you want to compare rates a specific property, it's best to compare quotes side by side.