Hey, mortgage salesmen/women - listen up!

[Writer]

:rant:

If someone comes to you to refinance their mortgage, and they have excellent credit and income, please keep in mind they're looking to refinance their mortgage - AND NOTHING MORE - got that?

Don't toss out creative financing with cute names like "PMI Buster," don't offer ridiculous interest-only mortgages with payments that will rise significantly after ten years, don't charge me three points upfront knowing that the $7,000 of extra principle I'll have to pay over 30 years will triple with interest - just give me your rates and terms. That's all. Nothing fancy.

I cannot believe how predatory they have been now versus when I first financed four years ago! Honestly I'm having an easier time with a traditional bank. What did they offer? A good 'ole 30-year fixed rate mortgage with a respectably low interest rate. Works just fine for me. :thumbsup:

:rant:

[Zuiderelle]

1. Go to LendingTree. I had no issue finding a very good, low rate, no frills mortgage there

about a year ago. I said up front that I wanted a traditional, 30-year fixed-rate mortgage, and of the six I talked to, not one of them tried to sell me on anything else. I simply went with the one that had the lowest closing costs and interest rate.

[skygazer]

2. Pushy sales in any area is obnoxious

And a turnoff. I don't understand it because it certainly doesn't work with me - I can't imagine it works with many people.

Virtually any sales position relies on repeat customers and word-of-mouth customer satisfaction. If you alienate your clients or sell them something they neither want nor need, they're not going to come back and they're not going to recommend you.

I spent about half an hour on the phone yesterday with a credit card company - I was cancelling the "payment protection" that I'd inadvertantly got on a card. I patiently let the woman explain what a great program it is then told her, "Thank you but I'm going to cancel it."

What does she do? Continues to try to sell it. I butted in (politely because I know she's just doing what they tell her to) and said, "Please don't try to change my mind - I don't want it."

And she continues. :eyes:

I finally said, "Look, have you got this thing cancelled yet?" Silence. Then she says, "You want to cancel it?" :rofl:

I'll be checking my statements carefully. ~sigh~

[kay1864]

3. If you haven't closed yet...

Might I recommend you take it one step beyond just rates and terms. When I refinanced my first house years ago, several places offered 6.5% and 1 point. When I asked the closing costs, they gave a standard answer like "3% of the mortgage amount".

But when I asked them for the breakdown, well, that's when I found out they left out things like doc prep costs, other fees, etc. The actual closing costs varied from $1100 to $3200.

I went with the $1100 one. :P

Same when we bought our current house. Saved myself thousands. The devil is definitely in the details.

[Gen. Jack D. Ripper]

21. They're a tricky bunch

The 3% number is only the origination fee. This is money the institution charges for underwriting the loan. The other costs are incurred by the underwriter and then passed on the borrower (doc prep, title insurance premium, etc). They may only quote the origination, but borrowers should expect to pay other underwriting associated fees as well. Always ask for a good-faith estimate up front.

3% sounds pretty high, anyway, We usually charge only 1%.

[Gormy Cuss]

4. With good credit and income these days, go straight to the banks.

They'll usually toss in something fun like premium CD rates, a safe deposit box, etc. Our original mortgage was sold to a large bank's mortgage division and when we refi-ed that bank bent over backwards to keep the loan. First question was whether our goal was to extract or build equity. Once we told them the latter we were offered a no points, no closing costs save a single $250 processing fee and the lowest rate they offered for a fixed rate mortgage.

They kept our business the old-fashioned way. They listened to the customer.

[Writer]

5. That's what my current bank is offering.

Although we are paying a third of a point, it's fairly straight-forward. I'm just shopping around right now to see if I can find a better deal.

We are at 85% of loan to value, and I wish we could avoid the second mortgage but after closing we'd be closer to 90% again. I wish a bank would roll everything together into one loan at a nice low rate.

[kay1864]

7. Have you tried a credit union?

We got a second mortgage from ours, with no closing costs.

We had 80% LTV on our first (with a bank), so no PMI. The second mortgage (with the credit union) is separate, so still no PMI. And the interest is deductible on both. Woo-hoo!

[Writer]

8. We're setting up a first and second with the same bank.

I haven't checked into credit unions, but then again, I don't know if there are any around here to check???

What we currently have is an 80-10-10 loan, 10% value on the second at around 8.45% fixed for 30 years.

[jobycom]

12. With the internet, you can join a CU anywhere.

I joined Pentagon Federal, in DC, and got tremendous rates on car loans and mortgages. Go to www.bankrate.com, where you can find the lowest rates anywhere in the country for any type of loan. Never get a loan without it. Credit unions, also, tend to have lower fees, which can be significant.

As for mortgage salespeople, my future ex-spouse is in the industry, though she is with a bank. There are a number of creative programs out there that are hard to understand and explain, but will save you a ton of money.

For instance, you mentioned PMI. My spouse got her start in a company that specialized in second mortgage PMI loans. The plan was simple enough--when you owe more than 80% of the value of your home, you are required to pay PMI, which is an insurance policy that you get nothing out of (as you probably know). In addition, some companies will not cancel the PMI even after you have more than 20% i equity. Her company would make second mortgage loans for the difference between the downpayment on the house, and the 20% of the value, so the buyer would not have to pay PMI. Instead, the buyer would pay the same amount of money that the PMI would cost, but they'd pay it to the mortgage on the house. Instead of throwing the money away, it would go to increase equity and to paying off the house more quickly. In return, the bank would charge a higher interest rate than the original loan (second mortgages are always higher).

It was a great deal with no downside.

So, sometimes salespeople who seem pushy know what they are talking about. Listen, then judge. A few minutes of time can save you tens of thousands of dollars. If you listen, but the plan is bad, just say no. Or, if you catch them hiding fees or misrepresenting the product or trying to close before they've explained it, walk away and don't look back, and take anything you signed with you. Those are the bad ones.

[kay1864]

14. Found these links via Clark Howard

http://www.creditunion.coop/cu_locator/index.html

http://www.ncua.gov/indexdata.html

Also, you might be able to get better than 8.45% on the 2nd. Clark recommends http://www.bankrate.com/

[Writer]

15. I go onto bankrate.com all the time. A very good site!

Let me ask this, though. I just received a phone call from another lender offering lower rates on both mortgages. I have my rate locked with the first bank, however. I'm sure that won't matter, will it?

[kay1864]

16. As long as you haven't closed, no

BUT...did you pay a deposit with the first to lock in that rate? If so, you might lose that deposit.

Also, find out *exactly* what the closing costs are for both lenders. Not "3.2% of principal"--but rather a breakdown of everything--attorney's fees, doc prep fees, appraisal, everything. Then compare.

And don't be afraid to play them off against each other. The first bank may match the lower rate of the second. Then you can get the second to match the closing costs of the first (if they're lower). Repeat. :)

[Writer]

17. Actually I have about four or five banks now...

it's all quite a circus. I just want to go to sleep and not worry about this anymore.

[EnviroBat]

6. What if your credit is maybe not so good?

What if you're in the 600's? Will a traditional bank still deal with you. I don't want to go to one of these mortgage shark places. I did get pre-approved for an 8.5% 40yr fixed a year ago. But I decided to wait and try to improve my beacon score a little more.

[Writer]

9. I think a traditional bank would deal with you...

you would just have to pay a higher interest rate.

I think!

Sorry not a broker... check bankrate.com and I'd bet you'd find better info.

[EnviroBat]

13. Thanks for the info Writer...

:hi:

[supernova]

10. Cross-selling is a plague upon this land

:rant:

I can't stand that when I go to a sales person to ask about item A, that they also try to "sell" me on items PQR, and S, and maybe even X.

Yes, I know you have items PQRS and X. No, I'm not interested in them. If I were interested in any item other than item A, I would have asked you about it. But I didn't so I'm not!

SO QUIT TRYING TO PUSH THAT STUFF ON ME!!

Argh!! It's enough to make me want to run screaming from anybody who says they are in sales.

[matcom]

11. if you can go to your bank DO SO!

I'm trying to get out of that industry desperately (i'm not in sales though).

Business is WAY down and they are desperate. Keep in mind your salesperson is on commission and likely not eating very much these days.

If you have excellent credit, walk don't run to your bank. If you don't have excellent credit these days you will almost certainly not be able to get a loan without points, ARMs, etc..

[kay1864]

18. MATCOM HAS TOTALLY LOST HIS STREET CRED

Here he is posting about commissions, credit, points...

and hasn't posted WORD ONE in my porn star thread.


The end is nigh, I tell ya!

[Writer]

19. Did you say "porn star thread?"

Oh dear... I must immediately switch my focus to the more emotive and prurient.

:P

[kay1864]

20. "switch"

:rofl:




Edit: Oops, sorry Writer, I didn't check, I assumed that was matcom replying.

But please, do check out the porn star thread. Only one reply so far, I'm losing my touch :P