Hey all,
I am looking to buy and move into a 2nd property (my first SFH will be turned into a rental). I am looking at some local brokers/banks and can get around 4% for a 30 yr conventional 5% downpayment. I am seeing online sites like Quicken or Box Loans advertising around 3.875% (the APR is lower than local rates too). Should I go with the online loans for the cheaper rate, or is there something I am missing? Any advice would be appreciated.
Hey all,
I am seeing online sites like Quicken or Box Loans advertising around 3.875% (the APR is lower than local rates too). Should I go with the online loans for the cheaper rate, or is there something I am missing?
You're missing the small print. Locals that aren't out to trick you (our reputation in the community actually matters) generally quote at somewhere between no points and one point. If someone is tight on cash to close, I might even quote at negative discount points (which is just what it sounds like).
Internet lenders, on the other hand, if you actually read the small print and the "Walk On Water" assumptions they make to arrive at that killer advertised/quoted interest rate....
(Link that'll give you that internet lender today)
You can ask your lender local to the Palm Bay area, or at least to Florida, to plug those "Walk on Water" assumptions in and see what their pricing engine spits out in terms of discount points for that advertised interest rate. It will generally be a lot better, because we live & lend in our communities so our employer doesn't need to spend a bazillion dollars on advertising. What we quote by default is YOUR scenario, not a "Walk on Water" scenario that's irrelevant to you, which is why the "quoted" interest rate by an internet lender will always appear better upfront -- are you putting 25% down, with a DTI below 30%, do you meet all those other bullet point assumptions, and (most importantly) wishing to pay more than two discount points?
you know the saying, you get what you pay for? this rule applies for online vs. local lenders. Although you may get a lower rate, the service and information you'll receive may be subpar(not all the time, but a good amount of time). I would suggest just shopping around first then make your decision once you've gathered enough information.
@Kyle P. most lenders will match other lenders prices. I would definitely suggest shopping around. I would also not just based your shopping on price but it is important. Ask for a "fee worksheet" so you can see all the lender fees and compare. And think of this like gasoline prices. If you go to one gas station today...then another in 2 days...and then another gas station next week....well, gas prices may be totally different. But if you compared all those gas stations the same day, then that would be a fair comparison. Same with interest rates. They change just like gas prices - sometimes they go up and sometimes they go down. And sometimes today's rate is totally different from last week's rate. So shop your banks the same day for best results.
While you are getting the fees still interview the bank. Ask about closing times, how many times your loan will be sold, check online for reviews, and so forth. And who ever you think is your favorite then show that bank the lowest bid you have and ask them to match it. Hope this helps!
Hey all,
I am seeing online sites like Quicken or Box Loans advertising around 3.875% (the APR is lower than local rates too). Should I go with the online loans for the cheaper rate, or is there something I am missing?
You're missing the small print. Locals that aren't out to trick you (our reputation in the community actually matters) generally quote at somewhere between no points and one point. If someone is tight on cash to close, I might even quote at negative discount points (which is just what it sounds like).
Internet lenders, on the other hand, if you actually read the small print and the "Walk On Water" assumptions they make to arrive at that killer advertised/quoted interest rate....
(Link that'll give you that internet lender today)
You can ask your lender local to the Palm Bay area, or at least to Florida, to plug those "Walk on Water" assumptions in and see what their pricing engine spits out in terms of discount points for that advertised interest rate. It will generally be a lot better, because we live & lend in our communities so our employer doesn't need to spend a bazillion dollars on advertising. What we quote by default is YOUR scenario, not a "Walk on Water" scenario that's irrelevant to you, which is why the "quoted" interest rate by an internet lender will always appear better upfront -- are you putting 25% down, with a DTI below 30%, do you meet all those other bullet point assumptions, and (most importantly) wishing to pay more than two discount points?
@Kyle P., I am a realtor that lives in Palm Bay. If you want to PM me, I can give you contact info to an amazing local mortgage broker that is super responsive and is my go-to guy when I really need to get a loan closed. He is quick and usually always returns great rates. He is easy to work with and gets loans closed on time. He can also tell you the differences between online / local etc. As a realtor, we have to keep a short list of proficient industry professionals that return great results because if one person in our chain (mortgage broker / bank, inspector, title company, etc.) drops the ball, it could kill a deal for us that we have put a lot of work into.