Cheap lenders to refi with

Cheap lenders to refi with
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#1

We recently moved from a condo to a SFH, and just closed on the sale of the condo this morning.

This means I can pay off a good chunk of principal and refi out of the loan I closed at in November (30yr super/conf with 20% down @4.75%) to something more reasonable (15 yr conf @3.625% with no closing costs).

Anyone have suggestions on where to look? Our original purchase loan was with Provident Funding. I found them to be easy to deal with (despite their reputation) and would refi with them again, but they have a 6 month seasoning requirement on refis and I’d prefer to take advantage of the recent short term dip in rates.

Better Mortgage looks pretty decent but if there are any others, I’d love to hear about them.


#2

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#3

I used boxhomeloans for purchase and 2 refis (~6months apart each from purchase), plus referred a relative for their refi. Was pretty painless. They had no seasoning requirement (new loan) or prepayment penalties (old loan), but it only had 5 months of payments before the second refi so they paid to extend the lock and closing a month later so that they wouldn’t lose $$$$ in chargeback from the previous loan origination. I didn’t have a problem with that and I was intentionally using the same loan officer for all three.

I did negative cost each time, ended up being paid ~$3500 total on $155k loan and I’m at 3.75% 28yr left. Unfortunately no more refinances at current rates.

To compare rates at multiple places, make sure you see if the place is including third party fees in the quote (they do) and adjust to compare accurately and that you’re comparing on the same day.


#4

Like I say in every mortgage thread, Zillow. More often than not it’ll give you better terms than any broker or lender directly.

Better Mortgage had been on top of Zillow results before, but I don’t remember if their direct rates were the same as their Zillow rates. The marketplace creates competition, so sometimes the terms are better on the marketplace.

BoxHomeLoans sold the mortgage to others, like Provident (although Box’s quote was better than Provident’s own quote). Neither of these were better than top Zillow results whenever I looked.

The 6 months seasoning requirement is common in my experience – they lose money if the loan is refi’d within 6 months. As Bend3r mentioned, you can start the refi process and lock your rate around 5 months.


#5

Technically its the prior originator loses the money. Which is mainly a problem if the previous lender is the same as the new one. On my particular loan zillow returned $1500 higher rates, accounting for third party fees that were only included in box quote, but for larger loans at the time Box was not the best rate. All documents easily uploaded secure portion of their site. For refis, they sent out a notary to meet me on closing. I also negotiated with the title co they used for -$300. Something like 14 days to close on the purchase and the first refi, the 2nd refi was 45-50 or something, due to 5 payments (loan officer half - asked if it was alright first, though. )

Who has the “Best” rates can often vary based on loan size and details, as well as the given day. And on a conventional mortgage you pay to waive escrow even when you have low ltv. The fees should be lower if you don’t waive it and then delete escrow after close, but ymmv on terms for the servicer to agree to deletion. Provident deleted my escrow and sent me the refund before my first payment was even due both times (~$800 profit between those two times together, if I remember precisely, from choosing NOT to waive escrow at origination, plus I essentially got small "cash out"s which otherwise would be $$). Amerihome refused to. But they said they will now, I haven’t gotten around to it since I’m saying on them to retrieve an overpayment (I had made a partial payment and they still paid the full original bill despite assuring me they would get an updated balance due before paying) from my taxing authority.

Righto on box and most others selling the loans. Box sold my first two to Provident. Third to amerihome. Relative’s also to amerihome. Provident and Amerihome also both immediately turned around and sold the loan to Fannie (or Freddie? I always mix those up) but retained the loan servicing.


#6

I found a discount lender (really more of an originator) on Bank Rate. They were a pain to deal with but eventually got it done. The loan was sold to Quicken Loans (this was known before closing), which has been an excellent servicer. The lender went out of business a few months later.


#7

Are the Zillow lenders actually legit? There are a few big names on there right now, but every time I look, it seems like a no-name or fly-by-night kind of place at the top of the stack. For instance, the top hit right now for my loan parameters is “Catlin Capital”. They seem to get good reviews but their rates via Zillow are much lower than the rates they advertise on their website.

I get a bait-and-switch feeling with some of them.


#8

This is common, as I already mentioned it in a previous post – the marketplace creates competition which does not exist when you go to the lender directly. The quote is only good on the marketplace – the same lender, or another broker that works for a different arm of the same parent company will not be able to match the Zillow quote if you call them directly.

The marketplace has been around for a few years. There is, or at least was a guarantee (and a unique number) behind the quote. There’s no point in baiting customers because they could easily walk away and call the next lender on the list. Take screenshots of the quotes so you can compare / verify. Ask questions. The third-party fees are not guaranteed, and I don’t think things like property taxes are included in the quote (any quote really). Just make sure you’re comparing apples-to-apples.


#9

I know there was not 3 years ago because I obsessively look at disclaimers, but I didn’t give them my info since they were higher at the time for my specific loan details.

I know there is not now. It very clearly says there is not at the bottom of the page https://www.zillow.com/mortgage-rates/quotes/

"###### ADVERTISING DISCLOSURE

Participating banks, lenders, financial institutions, originators, loan brokers, other mortgage professionals and their employees (collectively “Lenders”) pay Zillow Group Marketplace, Inc. (f/k/a Zillow Group Mortgages, Inc.) (“ZGMI”) a fee to receive consumer contact information, like yours. ZGMI does not recommend or endorse any lender. For more information on our advertising practices, see ourTerms of Use & Privacy.

Mortgage rates are displayed through ZGMI, a licensed mortgage broker, NMLS #1303160. For a list of state licenses and disclosures, please see Licenses and Disclosures. This website allows users to provide information to Lenders to request quotes on terms for home loans. Lenders may respond to requests with non-binding customized quotes of terms they would offer to a borrower fitting the user’s anonymous profile, and their contact information. These non-binding quotes are not official Loan Estimates as contemplated by Regulation Z.

Interest is only one of the costs you will pay when getting a mortgage. The data displayed in the rate table do not take into consideration your personal financial situation, verified credit score, income, existing debt, or other factors. Your final quote, rates, fees, and monthly mortgage payment may vary."

Now, a caveat about pointing out the full “unofficial” statement, the reasonable lenders who expose the full rate tables/quotes on their websites without requiring information and advertising harvesting DO often put similar disclaimers.

Edit before posting: I arbitrarily used box as an example.
I was also curious comparing zillow, even though I’m not looking to refi now. I put in 200k purchase, 20% down, 30yr, TX, in both places with zillow’s 0 points selected. Zillow shows lowest APR of 4.500% with $1 lender fees from “BOKF, National Association”. Box @ 4.500% is negative $713, or $83 in lender fees for 4.375%. So they still look less expensive at least for some loan sizes. Nearly a full 1/8% rate step or $714 lower in that example. Moral of the story is to definitely check zillow but also check around directly at other places. The best rates may be at different places depending on the loan size / location / terms you are getting quotes for.

Edit 2: Provident Funding with same terms displays $2800 lender credit at 4.500%, but they have a $1099 “administration fee” disclosed elsewhere. That still comes out to net of -$1700 though. $1k lower than box, and $1700 lower than zillow.


#10

Don’t know if it’ll help, but try the “no fees, no points” checkbox instead of “0 points”.

I thought the quote was guaranteed, but I could be wrong. I no longer see the unique quote number either, in fact they changed the process quite a bit. It used to show a much more detailed quote when you clicked on the lender, now it just asks for information. I never actually filled anything out on zillow, just dialed the provided phone number. I’ve done this twice, and the quote given to me was exactly correct. They have to put the disclaimers, because they make assumptions about the applicant based on their inputs, but if that input is incorrect or there’s something else odd about the application, the terms could be different. Also the lender gives you choices (regarding rate vs points, escrow waiver, etc), which make a difference. The zillow quote assumes there’s no escrow waiver, which, in my experience, costs 0.25 points (that’s 0.25% of the mortgage).

It has also been my experience that removing escrows is possible < 80% LTV (and/or after some number of on-time payments), but it’s not free, it still costs 0.25% of the outstanding balance.


#11

I have not seen a fee to remove after close. But I only have the 3 times as reference, so maybe some do charge… Seems like any fee for deleting escrow would need to be disclosed in the loan paperwork, because they can’t just arbitrarily add on new costs when the loan is transferred between entities. actual conditions to remove it are fully YMMV, I’m sure the servicer could refuse entirely.

But it seems like running the escrow only costs them money… so there’s a business case that they should want to close it, assuming LTV is low. They can re-establish it later if tax payments or insurance are missed.


#12

Yeah that only makes sense. I’ve been paying taxes and insurance myself and requesting refunds from the escrow department, so it costs them even MORE to deal with me than with their conformist customers, but they still told me it’d cost 0.25% to remove it. I don’t remember seeing this fee in the loan docs and wouldn’t even know where to look, but it would make sense for it to be documented.


#13

In any case, even if Amerihome still won’t remove it (phone has said they will if I email asking), I am glad I didn’t pay 0.75% (purchase+ 2 refis = 3 x 0.25%) of ~$160,000 = $1200 to waive it. That’s a steep premium for me holding on to an average of $3k for a year, equivalent to about a 40% interest rate.


#14

When I refinanced, “Neighborhood Lender” came in way lower than anything I could find online. So much lower that when I asked the other brokers if they could match them, they told me that the estimate was unreal and was likely a bait and switch. I told them thanks and I would call them when the switch happens. The switch never happened. It was 100% legit. And they sent someone to my house to sign all the paperwork electronically. They are only in a few states though.


#15

My experience thus far with Zillow/BankRate:

  • Lender 1 (Agora) had a significantly better deal than anyone else up on the site. I put in a request for contact. 10 minutes later, the rate was pulled and I received no follow up. I figure it was click bait for contact information.
  • Lender 2 (LenderFi) had a decent rate up there that was better than the rate advertised on their website by a good amount. I sent in a request for contact. Got an automated mail asking for a reply on when the best time to contact them was. I replied. Said email proceeded to bounce back.
  • Lender 3 (Accelin) had significantly higher 3rd party closing costs than my past experience showed, and what other lenders were advertising. The guy I talked to on the phone was your typical stereotypical salesman and just left a bad taste in my mouth.

Right now my opinion on the Zillow marketplace has been that it is a gigantic waste of time.


#16

Update - Better Mortgage advertises through several of these sites including Bankrate and CreditKarma. CK had the best rate, so I clicked through there and got everything done electronically.

Unlike the “fly by nights” that advertise on there, they actually showed me the rates online and I was able to lock without any problem. The loan costs were about $100 higher with them than some of their “competitors” but the 3rd party fees are reasonable and their website has made the first part of the process fairly easy. I’ll report back as I move through the process.


#18

There is a phone number in the top right corner of the “securecontactpage” that shows up when you click a Zillow mortgage marketplace listing. Why didn’t you try that?

Perhaps the marketplace changed for the worse since I used it. But as I mentioned, I never gave my contact info to the website, I dialed the number and told the lender/broker about the rate, and proceeded from there once these terms were confirmed. Sending a message is asking for trouble, because rates change constantly and offers appear and disappear. Calling in gives you the best chance IMO.


#19

I did that for #3. And it turned out poorly - the guy quoted the rate on Zillow and then proceeded to quote me outrageous third party fees - $1000 for the appraisal, $150 for the credit check, etc. This will be mortgage #5 for me at this point and the fees quoted to me over the phone were ridiculous compared to what I had paid in the past.

I’ve done 4 previous mortgages - one with a local credit union, one with CashCall, one with Box, and another directly with Provident. All four of those, even the one with the local credit union, were up front and straight with me on costs and pricing was available on the web in clear and uncertain terms. Same thing with Better - all the pricing was upfront, the clickthrough rates were honored by their calculator, and I could see what everything cost.

I’m not saying Zillow is always bad, but my intuition was that many of these firms were offering “too good to be true” rates and at least in my case, that’s what they were. In my experience shopping for a mortgage, finding an aggressively priced correspondent or wholesale lender like Box, Provident, or CashCall is going to beat the random broker sitting by a phone most of the time.


#20

Like I said, things may have gone downhill. My past experience was that they weren’t random brokers sitting by the phone and their terms (rates and fees) were better than both Box and Provident (even including the Provident customer discount :wink: ). I never checked cashcall, my thinking was that since they advertise heavily, they can’t possibly have the best terms.


#21

Neighborhood Lender advertises their no closing cost mortgages like crazy on talk radio around here. I figured they were some sort of bait and switch, but they could provide at least a baseline. Then when a quicken broker told me he couldn’t match them and they were 100% bait and switch, I got worried. But they turned out to be 100% legit. In my lone datapoint, the heavy advertising didn’t mean jack (quicken advertises a lot too).