Yeah I think it depends on where the company is. I always go with the lowest apr I can find from a reasonable company.
I “made the CashCall” when they first started getting into the mortgage business to diversify from their 99% APR payday loans. I think they were trying to aggressively price because at the time their pricing was beating the pants off of everyone else. Now they are not so competitive.
Box is interesting because again, at the time back in 2013, they seemed to be targeting the cream of the crop and offering aggressive pricing for high credit score borrowers. No FHA loans, etc. They’ve since made the box “bigger” and as a result, their pricing seems to have changed for the worse.
Provident is always competitive, and is usually the lender behind many of the quotes on Zillow and Bankrate, but their loan processing is definitely more onerous than others. They don’t logically connect things together - i.e. if you shuffle money around various accounts, they want written explanations for each one even if you’ve already provided bank statements explicitly demonstrating where the money came from and where the money went. They freaked out when our mailing address was different than the address on our existing loan (USPS made 911 address adjustments) and it took three rounds of explanations to satisfy them.
I think Better is still in startup mode and has cash to throw around at people, hence why their rates and terms are actually lower than Provident’s. Thus far, I have been impressed with their speed, 49 underwriting conditions have been marked as “done” with only 2 outstanding (insurance validation and the appraisal).
3/7: Submitted initial application.
3/8: Got “Underwriter approved” after documents were verified.
3/12: Appraisal took place
3/14: Appriasal came back, $20k over what I bought the place for 4 months earlier.
3/21: Closing disclosure generated
3/25: Signing
3/29: Funding
Better’s strength is easily their tech stack. It’s super easy to track status, upload documents, see what they are currently doing with your stuff, etc. Their pricing, through Credit Karma was the cheapest at the time I put in my app and locked. That includes the third party costs.
The drawback was the title and escrow company they picked, Spruce Land Services. They were dirt cheap, which was great, but things took longer and there was zero insight into what they were doing. There were a few things that needed explanations on the title report, and these sat as active for about a week (betwen 3/14 and 3/21) which delayed closing. That said, they were cheap and they got the job done… so I was fine with it.
My loan was sold by Better to SunTrust. Overall, I was pleased with the process. Had I refi’ed two weeks later, I could have done a little better on rates, about an eighth of a point better… but I’m happy to have cut 1.25% off the original loan. I can always refi again if needed.
I used aimloan for a refi last year and it was pretty quick and painless. I refi’ed about 4 months after originally purchasing the house (through Amerisave online) and was done in less than a month. Competitive rate and everything was easily track/uploaded online. I liked that the account rep I was working with was on the west coast so I could do a lot of stuff right after work, which was still business hours for them (I am in EST). Not sure if all of their operations or out there or not, but it worked well for me. Their servicer is good as well.
Third Federal advertises heavily through direct mail but I’ve found them to have ridiculously cheap rates for their ARMs. Their prime rate is a bit higher when the ARM starts adjusting, though, but they allow rate relocks.
I’m refinancing again. I was able to snag 2.75% on a 15 year from one of the lenders above that never replied to me back in March - LenderFi. This is with 0 points… I also qualified for a Fannie appraisal waiver so I just have to pay the junk fees like escrow and title, which is roughly $1500. Oddly they were priced much lower than everyone else, a full quarter point below the lowest fly-by-nights on Zillow. I’ve got a signed rate lock processed and ready to go.
My initial impression is that LenderFi is slightly lower tech than Better… the website itself is less slick and feels a bit stuck in 2005. But it’s functional and on the flip side, the guy I dealt with over the phone knew what he was talking about. He also realized I knew what I was talking about when I started talking about random Fannie Mae underwriting lending guidelines and how I monitor mortgage backed security pricing to figure out when I should start shopping around for rates. He offered several suggestions on how to speed up the process that most other originators have no clue about or just don’t care to mention.
I went through CreditKarma instead of Bankrate/Zillow and I’m now 2/2 going through that channel to find the lowest possible rate. For reference, LenderFi’s pricing through CK was about $450 lower than through their website.
It’s the rate. The APR according to the GFE is 2.812%.
The difference doesn’t entirely surprise me. I monitor MBS prices pretty closely on mortgagenewsdaily.com - they’ve been pretty rate-unfriendly the last two days. I locked when rates were on the last day of a 7 day winning streak.
Watch that website and wait until you see MBS prices for the 3.5 coupon around 102-25 or so… that’s when I got this rate.
Thanks for the reply. I will keep an eye out. Very interesting. I am in a 15 year at 3.25%. Didn’t think rates would drop enough to be worth a refi (again) but it may be yet again…
An update. I have been through some quick refinances in the past, but this one easily takes the cake.
I applied on October 8. I submitted bare bones docs at that point - stuff like my driver license and bank account statements. Was approved for an appraisal waiver at this time as well.
Apparently they didn’t need anything else because 72 hours later, I was informed they were ready to schedule closing. They sent me my closing disclosures, wifey and I signed them, and they scheduled a signing for Thursday, October 17 and disbursement on Tuesday, October 22 to accommodate the mandatory 3 business day rescission period.
If this actually comes to pass, that would mean 3 days to final underwriting approval, 9 days to closing, and 14 days to funding. I have had underwriting go quickly in the past but I have never had closing and funding go this quickly.
There’s still plenty of time for stuff to go wrong… but I’m floored at how quick this has gone thus far. I’d use these guys any day of the week, even if they are a few hundred bucks more than the competition.
In the 8-10 refinances I’ve done in my lifetime, I’ve never found the best deal in the same place twice.
Four years ago we refinanced our primary home and our second home simultaneously, and went with two different companies in order to get the best deal for each.
The “best” or “cheapest” lender is going to depend on your location, credit score, loan amount, DTI, whether the home is primary or secondary/vacation home (or investment) LTV, loan term, loan program, and about 700 things I’m not alert enough to list this early on a Sunday morning.
Sage advice, and your experience mirrors mine - I’ve done 6 in my lifetime, all with different lenders, going with whomever is cheapest.
That said, for agency loans that will be sold to FNMA and FHLMC, most of the fees for the ancillary stuff (like FICO adjustments, waiving escrow, LTV adjustments, cash out fees, etc) are dictated by Fannie and Freddie. Any lenders that are cheaper than what Fannie dictates on those items are just pricing those items into their rate. For instance, Provident waives escrow for “free” but they are pricing in the quarter point Fannie charges them to do so into their rate, origination fee, and points. They still have to pay that to Fannie regardless. Of course, this doesn’t preclude a lender from charging more.
Where lenders really differ are the origination fee, rate and points for a given FNMA product (rate/term, conf vs super conf, loan amount, etc), and their 3rd party fees like appraisal, title/escrow, credit report, etc. The location is a big one as well - NY for instance piles on paperwork and regulations which causes most lenders to charge more there.
All that being said, I do think it’s worth having people share their experience with various lenders with regards to pricing and service. I like hearing about this to make sure I’m not missing anyone when I shop around, and to see if some of the “fly by nights” are legit or if they are just too much of a hassle to deal with. I think this is particularly true with all the disruptors out there in this space (like Better for instance) - I’m sure there are new lenders I missed this time around that I should have compared my deal with.
I hope that wasn’t interpreted as thread crapping, because that wasn’t my intent. I was merely trying to reinforce the need to shop every single time you are in the market to ensure you are getting the best deal.
And sometimes the best deals are from portfolio lenders (who don’t sell to a GSE or some other investor). Just last week I paid off our 3/1 ARM from Third Federal, just a couple of short months after the first rate adjustment (from 1.74%).
I openly weep when I hear that someone selected a mortgage lender simply because it was where a brother-in-law “got a good deal,” or because a neighbor who’s a part-time REALTOR® said so.
Oh not at all :). Outside of first-time homebuyers, or people in a purchase situation that dictates a local lender, I think it’s stupid not to shop around and find the best deal, and it very likely isn’t going to be the same lender each time one refi’s.
There’s so much noise in this space though, with brokers, correspondents, banks, online shops, etc… that it takes a bit of legwork to get the best deal. IME, watching rates on the BankRate/Zillow/CK portals, studying MBS price trends, and jumping to lock a deal once you see one that stands out from the rest is the way to go. This is particularly true for folks on here, who have excellent financial hygiene and see this as a hobby.
This was me 10 years ago when I bought my house (as a first time homebuyer). I know better now. I’ll be looking to refi again next month after what I hope is another rate cut. I’ll be shopping around like crazy this time. Hoping to go from 20 years to 15 and pay a similar monthly payment.
I will warn you - the anticipated rate cut is likely already priced into the market. MBS prices do not necessarily track the fed rate. Refinance risk is a big part of the mortgage rate equation.
In fact, any decrease you do see often lags far behind a rate cut.
IMO, the best chance of seeing lower mortgage rates is not a fed rate cut, but worsening economic data and/or some kind of trade war with China that causes investors to put their money in MBSes rather than stocks.
Correct me if I am wrong (I very well could be since this is the first time I have ever looked at the cost of a mortgage backed security), but the rates improve as that 30YR FNMA 3.5 goes up?
But think of it this way - as more people want to buy MBSes (i.e. demand increases), the incentive needed to get people to buy them goes down. The incentive in this case is the interest rate. So as the price of a mortgage-backed security increases, the interest rate goes down.
I was merely trying to reinforce the need to shop every single time you are in the market to ensure you are getting the best deal.