Mortgage or Bank for a first time HOME BUYER??

Question

So right now I am a bit in a predicament because I don't know whether to choose a mortgage lender or a bank for a home loan. The reason why I'm leaning towards going with Chase bank for a home loan is because they allow for me to put 15% down instead of the opposed 20% for a conventional loan and the house I'm under contract with qualifies for a $5000 grant as a first time home buyer (meaning that Chase Bank will cover $5000 of all fees) Which is a HUGE BONUS. I did the Math and I end up saving over $9,000 as opposed to going with the mortgage company. Now the mortgage company isn't as flexible and does not allow me to put down 15% because I was told that it would NOT work. And I know what you're thinking "why don't you just do FHA" while that is 100% true I cannot because it just Simply wouldn't work for this house. I ran the number for the house I'm under contract with and they are great. Overall great property. So Chase Bank sent me a Pre-Approval and these are the terms and I want to get your thoughts.

Mortgage Type: Conventional 30 year Fixed

Interest Rate: 6.625%

Points: 1.033%

Apr: 7.077%

15% Down

$5,000 in credit towards Total Fees

** REASON WHY I WANT TO PUT LESS DOWN IS TO HAVE MORE CASH RESERVES IN CASE ANYTHING GOES WRONG**

Mortgage Type: Conventional 30 year Fixed

Interest Rate: 6.625%

Points: 1.033%

Apr: 7.077%

15% Down

$5,000 in credit towards Total Fees

** REASON WHY I WANT TO PUT LESS DOWN IS TO HAVE MORE CASH RESERVES IN CASE ANYTHING GOES WRONG**

Tim Delaney · Answer

@Abner Sanchez how much is the difference between putting 15 and 20% down? I’m usually looking for ways to use less of my cash so that sounds more appealing to me. But it’s tough to know for sure without all the numbers, including the rates and terms of the mortgage company.

Jon is right, a broker may be able to get you a better deal. But there is no reason that if you go with Chase and take that $5k grant that you couldn’t also ask the sellers for some credits - maybe to cover the points and/or buy down the rate a little more.

Matthew Wilson · Answer

Hey @Abner Sanchez,

I agree with @Jon Puente, a mortgage broker could help you find the best available offers out there. I have only spoken in the past with people from David Greene's team at The One Brokerage but they were able to get me and my partners a plethora of different options to choose from and (although there's no guarantee) could help you find an even BETTER term than Chase without costing you much!

Hope this helps out! It is always beneficial to have all the right information before making a big decision.

Where are you looking to invest?

Jon Puente · Answer

Hey Abner,

What state are you in and have you contacted a mortgage broker? Typically brokers offer better rates and fees than big banks or retail lenders because they can shop around for the best deal pertaining to your scenario.

FYI - 5K in credits really isn't something to automatically choose a lender over, because you can have a seller cover all of your costs in this market anyways.

Start reaching out to brokers in your area and compare your deal.

Mortgage or Bank for a first time HOME BUYER??

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