mortgage with big bank versus small (local) bank

May or may not be true depending on your co-ops financials, own to rent ratio, and if the bank actually offers co-op loans. I used Astoria Federal but that was a while back. They were good and the rate was about 0.25 - 0.50 lower than bigger banks.

I just closed on my condo purchase. I had a very good experience with Michael Calica at GuardHill Financial. I ended up giving his information to the seller's broker because she was impressed by how fast the mortgage came through. Some of the parties at my closing commented on how long it takes BofA...

The smaller banks and credit unions have a little more flexibility in what they can do for you. Plus, some employers work with credit unions, so that if you specifically use them you will get a better rate.

Just as an FYI, I am obtaining a mortgage now and I went through the process with both Wells Fargo and TD Bank. It took Wells Fargo seven days to get me a preapproval and it took TD Bank one day. After seeing how each of these banks performed (the rates, for comparison sake, basically were the same) I went with TD Bank based on the speed of receiving my preapproval. More than ever these days, it isn't so much who will give you the loan, but who can actually close in a timely fashion when you are finally ready. (I need to say that I absolutely love TD Bank as a bank in general, and I was very happy when they were able to issue me a mortgage as well so I can keep all my accounts together.)

(Matthew Russell - Brown Harris Stevens)

Interesting as i worked with Wells Fargo on my purchase a few months ago and they ran numbers for me over the phone and if i needed the preapproval letter for the offer would have had it next day.

Because they had all my info when i needed the committment letter after i signed my contract, i had it within a day as everything was already in place.

I then had no issues getting through the mortgage process and was able to close within 5 weeks of signing my contract.

@ Mikev: I would like to be a little more clear and say that I wasn't saying you should avoid Wells Fargo, I too have friends with mortgages from there with no complaints. Since I hear horror stories about banks that keep requesting more and more information or ones that cannot close in time, I took the amount of time they took as a sign and chose because of that. Not the most scientific approach, but the one I took. Plus, my existing relationship with TD Bank was another plus for me. The same could be said if anyone had a Wachovia account as they are now owned by Wells Fargo.

At the end of the day, you really should go to at least 2-3 different lending institutions and see what they can do for you.

I do not disagree. I called 4-5 banks and spoke to two different mortgage brokers before dealing with wells fargo. It turned out in the end they were a preferred lender on the new condo building i bought into so that worked out also.

Two separate local Wells Fargo branches told me to call the 800 number to get a general pre-approval and then call the branch back once I found a specific property. So I did as I was told, and let's just say the phone rep who provided the pre-approval was none too happy when I tried to deal with the local office instead of her after finding a property. The channel conflict that emerged left me in limbo and with a very bad taste in my mouth, so I moved on.

Given the then-fragile state of the market and the complexities of co-ops (especially small co-ops), I was not comfortable dealing with a loan officer in Minneapolis. But the loan officers in New York weren't willing to give me the time of day until I found a property. Except to have my bid accepted, I needed a pre-approval.... It was all a catch-22.

On a positive note, I will say that I got the pre-approval within an hour of speaking to the phone rep in Minneapolis.

My experience w/ wells was similar-- it took forever for them to get approval to close-- they were the preferred lender of new construction, no major issues, but every little thing that they needed took for ever to clear underwritting. When i was fuming over this the mtg broker told me that they are running on a skeleton crew in underwritting dept.
one thing i would want to know before using a smaller lender is whether they would do a cema transfer if you were to refi, to avoid repaying nys mtg tax. i think b of a does not do cema (or maybe its one of the other big lenders that don't) but to me this could be an important issue and cost you tens of thousands if the need to refi arose

I said it before and I'll say it again. I think it depends on the loan officer more than it depends on the bank or lender. You can work with 2 loan officers at the same bank and get 2 completely different results. Structuring the loan, setting expectations, being available for questions are all on the loan officer, not the bank. sunny.hong@bankofamerica.com

I agree with sunny. the mortgage broker i worked with at wells was very responsive. Also in the end when i was finishing through underwriting they put me in touch with the woman who was the go between wiht the underwriters and we were all able to work together to get it done so i could make my closing date.

it really just depends on the people. I have a friend who was also looking to use wells and the broker they had was just never available.

Eqsuire, BofA certainly does CEMAs, as will just about every bank in the area, large and small. The one major exception is HSBC. Once you do a loan with them, you're pretty much stuck because they won't allow you to assign your mortgage out on a refinance.

anyone know if Investors Savings Bank allows CEMA?

Ekartash, yes they do.

I agree with Sunny that it's the loan officer, not the bank. I had clients who went with BofA and had a lousy experience, and then a client who used Sunny -- and couldn't say enough good things!

ali r.
DG Neary Realty

I'm now two days into comparing between a smaller lender and B of A (it took ages to get the seller's signed contract). The B of A officer I was put in touch with through my branch is quoting lower rates, saying he can waive the fee for discount points and urging me to lock in a 60-day rate now when my closing is scheduled for sometime between dec 1 and dec 31 (more like 75 days from now). the other lender is quoting slightly higher rates with no points but suggesting that we wait to lock at least until our board interview is scheduled so as not to risk being charged extra fees if we go past the deadline. he also responds to my e-mails like lightning (even at 8am on a sunday morning) and seems genuinely patient with me (a first time home buyer). Plus this lender promises to process my application within 3-7 days. At this point, I feel inclined to make my decision based on whether the loan officer and the lender seem like a good fit for my needs instead of simply choosing the lender that promises the lowest rates. I'm glad to hear that some of you would agree with this logic.

citygrad, thanks for posting. My advice would be to choose the lowest rates, because even a small difference would add up to a substantial amount over time. Your decision will of course depend on how much you think that service is worth paying for over the life of the loan.

Can I ask you which local banks you've contacted? Thanks.

i am working with a lender called GFI - they quoted me 5% for 30yr fixed versus B of A who quoted 4.75% (4.65% with discount points that they will waive the fee for at closing. I'm still not clear whether the purchase price of the points would be waived or just the fee for purchasing the points - hence my slight discomfort.) This particular GFI loan officer was recommended by a close friend who had a very positive experience, but you are absolutely right about considering the financial impact of this - .25% is roughly $80 per month based on my loan amount. Definitely a significant amount of cash over the life of the loan.

Do you have any advice as to who else I might contact?

Why don't you ask GFI to match BOA's offer?

Citygrad, thanks. I've also heard Wells Fargo on the big bank side and Emigrant was casually recommended to me, but this is all I know at this stage.

hofo - I did attempt this. GFI basically told me that B of A's offer is bull - that if I roll the dice with a 60-day lock I will get screwed when it takes 45 days to get the commitment letter and then our co-op interview gets pushed back and we miss the settlement deadline - or worse B of A won't come through with the commitment within my 45 day window and then I'll lose my deal altogether.

I'd like to add that in the midst of all of this I was just reading about 30 year fixed rates hitting a low of 4.27%. Granted, I don't have impeccable credit, but my quotes are nowhere near this low! Is this just not a NY thing? I don't get it.

citygrad, in order to get those rates you have to put down 25%-30 %, loan has to be conforming and you need 760 credit scores. If you fall into this category, you're getting screwed.

Thanks NYC10007 - I figured it was something like that but it's helpful to have it spelled out for me.

evnyc - I'll be looking into both of your recommendations tomorrow. Thanks very much.

GuardHill matched the lowest rate that I received from another bank. They also encouraged me to make sure that I didn't end up in a bind by locking in too early. The seller has 30 days to extend the closing date and if they decide to do so, you will face increased costs if your lock expires. So GuardHill had me double check to make sure they had no plans to delay closing.

I wouldn't trust GFI. have had 2 people with bad experiences with them. one put in a loan application in spring/early summer and still waiting for a commitment letter. they tried to bump my niece's rate by 1/2 a point just before closing because "her credit got worse". she delayed the closing by 2 weeks and cleaned up some things that were there on her credit report from the beginning (5 yr old errors). her score was in the 700s.

Omega, did you work with anyone in particular at GuardHill?

Michael Calica. He was fantastic. Definitely would recommend him to others.

Thanks, Omega.

I spent most of the day today on the phone with different lenders. Wells Fargo seems to be offering the lowest rate.
I also happen to like the woman I spoke with from Wells Fargo - a definite plus.

ab_11218 - Thanks for sharing re: GFI. I would imagine that what your niece encountered is something that could happen with a lot of lenders. I have heard from at least two that a final review of my credit and finances will be performed that could affect the loan commitment. This is also something that my lawyer warned me about.

Does anyone have any insight regarding having at least 3 open lines of credit in order to qualify for a high balance conforming loan (417K-729K)? All of my life, people have warned me that it's bad to have too many credit cards. Now I'm finding out that it's bad to have too few.

omega - I am very wary of locking in too early. Right now I am 45 days from my scheduled closing - 75 days from the latest date the seller could push it back. I'll have to start an application with whomever I decide to work with and float the rate for a little bit while the application is being processed in order to be on the safe side.

citygrad, you ask a great question about how many credit cards to have open. The problem is, there is no good answer because each credit bureau scores slightly differently. What I've learned are two things. Length of having that same line of credit and the amount of credit being used are the two primary factors. Here's the catch. Transunion, for example, won't use credit lines in excess of $30k in their calculations. I learned this because the percentages didn't add up when I checked my FICO one time, and after some serious digging and finally talking with a manager at Tranunion, they explained how the calculation works.

Also, if you have an Amex Charge Card (like the Green, Gold, Platinum or Centurion...not a separate points sponsored card) that has no credit limit, they use your highest previous balance as the credit limit. This caught my wife, because she always tries to keep the charges low, and never had a particularly high month, so it appeared as if she was using 80% of her available credit all the time.

Bottom line, when you check your FICO scores, read into each closely and call the bureaus to ask questions for things that don't make sense. Worst part is that they are not consistent with one another, so you may change your habits to make one score better, but the same change will make another worse.

Kind of sucks...

Citygrad, generally speaking more open lines of credit are better, although the mix is also a factor. Credit scoring rules change pretty frequently, so at one point having too many credit cards probably was a negative.

Nowadays, what matters is the percentage of credit used compared to all credit available. So, for example, if you have a $9,000 balance on a $10,000 line of credit, lenders are going to look at that and say, hm, this person is using 90% of available credit - red flag! There are two possible solutions: pay off the credit card and use it lightly in the future, or call the company and ask for a higher limit.

If you have lots of credit cards with low balances and a substantial history you look much better to lenders. A number of personal finance writers address the issue. My favorite is Liz Weston; you can get her books at the library or search for her name online and read her website and articles.

I only have two credit cards, for what it's worth, and one of them is a legacy from my student days that I keep around in case of emergencies.

NYC10007 and evnyc - Let me clarify, I am interested to gain insight into the impact of having (or not having) 3 open lines of credit when it comes to a person's ability to qualify for certain types of loans. I have heard from 2 lenders that I must have 3 open lines of credit (and cannot count a utility bill or any other revolving account) in order to qualify for a high balance conforming loan. This may be something that the lender decides, it may be a fannie mae regulation - I am currently looking for more information. This differs from how having open lines of credit might affect your credit score. As it was explained to me, a person with a credit score of 800 could have only 2 open lines of credit and therefore not be eligible for a particular loan. Have you heard this as well? I'm also interested to know whether something like checking plus on your checking account would count as a line of credit in this case.

Citygrad, that's interesting and I haven't heard that before. I don't believe but can't swear that a checking account counts as an open line of credit UNLESS you have an overdraft line of credit. Note that the Overdraft LOC is not the same as overdraft protection or other misleadingly named "services" that charge you a $30+ fee for overdrawing your account. The line of credit is just that - you pay interest on the amount you're overdrawn, so I would think that would count.

I guess it isn't an issue for me, thanks to all the student loans I've taken out over the years. If you have student loans, those should count, right?

Our guideline is that there must be a 3 tradeline history of 24 months or longer. At least 1 of the 3 tradelines must currently be open and have at least a 12 month history. So this means the other 2 may be closed accounts that had 24 months or longer histories. On high balance conforming loans, non-traditional credit such as utility bills, rental history is not allowed. sunny.hong@bankofamerica.com

shong - thank you so much for your response. this is exactly the kind of explanation i was looking for. i see that you are with bank of america and it's a shame i did not speak with you sooner as i am already talking with someone there - who, i might add, could not provide me with as thorough an answer when i asked him the same exact question.

is it true this criteria could be somewhat different for different lenders? wells fargo told me i needed 3 OPEN lines of credit: at least 1 of them must have minimum 24 month history and the other 2 must have minimum 12 month history.

also - as lenders change their guidelines from time to time, could this affect my loan commitment if the change takes place before i close?

citygrad - i have seen some variance between lenders on the tradeline requirements. If guidelines changed after your commitment is issued, you'll likely get grandfathered into the old guidelines.

Also, I'd like to mention that when I talk about the length of the credit history, I am referring to "payment" history. So a tradeline with 12 month history means that there were 12 months of payments made on that tradeline. If someone opened up a credit card 3 years and never used it then this would not count as it does not show a payment history.

shong - thanks for your additional responses.

I'm a mortgage broker. I work mainly with Wells Fargo. They're pretty fast. And since I am a sole proprietor, with very little overhead, you can't beat my rates.

Also give peroanlized service. Been a broker over twenty years.

esfundingco@aol.com