Mortgage rates

>But some are offering additional discounts if I establish a "relationship" with them, that is, move my banking and retirements accounts, etc. The more I move the better the discount.

Are you male or female?

They're after wallet share. They want to make money not only on your mortgage but on all your banking needs. Some banks have also been known to offer lower rates on non-full doc loans when the borrower has a credit history and current relationship with the financial institution.

It's industry standard today to ask for a bigger relationship. Wells Fargo charges 25 basis points more if you don't pay your mortgage via autopay from a Wells Fargo account.
Loans to buy apartment buildings are always tied to opening up an operating account and or security deposit account at the lending institutions retail bank.

They charge 25 basus points less if you do autopay...

They quote you a rate (say 3.875% for a 10 yr Jumbo ARM). You say "Great I'll take it" - then they tell you that if you don't pay with via autopay from a Wells' account that they will charge you 25bps more than their quoted rate.

They quote you the best rate option. Market is 25 bp higher.

Right, they quote you the rate that implies you have a Wells Fargo account. Then a week before your closing you go and setup one to keep that rate! If you have a decent sized mortgage (about 500K or above I believe), they give you the nicest checking account automatically.

Some people will keep their main account in Chase or Citi or whatever, and then transfer a certain amount each month to the mortgage bank which will be automatically deducted for the mortgage payment. If you have a mortgage with a bank, they will sometimes waive the requirement to maintain a certain amt in the account (since they count the mortgage as essentially maintaining a high amount with the bank). Therefore you may be able to keep your current bank and keep only a limited amount in the mortgage bank's checking account.

They are talking about more than just opening a checking account for payments. They are talking about significant relationships (banking, brokerage, etc) for more discounts than the 25 bps.

Sounds like a good deal. You should get your banker to confirm all the conditions in writing/e-mail.

Tough call. I am loathe to leave chase for main banking because they are so convenient. It would be important to find out exactly what they want (mortgage, sure; checking, how much?). People can have checking accounts in multiple banks. No mortgage company can demand that you keep all your money with them, have direct deposit, etc. I would get specifics about their request and figure out if its worth the difference in rates. Good luck.

Jumbo rates according to yesterday's, Wall Street Journal are now the same as conforming rates.

Shop around. Rates for jumbos have come down.

Ellen Silverman
E.S. Funding Co.
Licensed Mortgage Broker since 1990
Licensed Real Estate Broker sconce 1987
esfundingco@aol.com
www.esfunding.instant lender.com
NMLS#60631

Icahn and cooperman bought after w67 call on apple. Cooperman was also late to the sprint party.

-shrug- go Team RE!

But at least they showed up.

Go Team RE! Lovez it. Buy, Reno, flip! Keep an eye on mortgages though. Looks like it might go lower!

UESprospect - seems that their is only upside in the expanded relationship - if their rate is 3.875% - plus 25bps if you don't have any relationship with them - then if you don't want a relationship with them just set up a checking account, transfer funds into it each month to pay your mortgage and move on.
If they'll lower your rate from 3.875% for an expanded relationship it's normal treated for any type of private banking relationship. The discount they give you on the mortgage may or not be worth it, but the math should be pretty easy to figure out.

UESprospect. No, not a gimmick. I'm doing the same thing. Citi for example is offering 3/8 of a percentage point off a jumbo 30yr if you have over a $1mm in assets with them. I think they knock off 1/4 point or so if you have $250k. You only need to keep it there through your closing, but it's well worth it.

If you plan on keeping the property for a while, you should consider paying a point or two to buy down the rate. As a separate note though, be careful with those adjustable rates. After the fixed 10yr period they can reset pretty high, depending on prevailing rates. So if you are going to stay in the place more than ten years, go for a 15yr or 30yr.

Thanks for all the posts. I think that in the next 10 years, we will hopefully upgrade, so I think the 10/1 arm is a good choice for us.

The difference is substantial. The rate they are offering is 0.5-0.6% less than the big boys are offering. Trick is they do not rate lock, though they indicate the rate is stable (changes a few times in the year only, not daily). It's a reputable bank (not a little internet shop)

Can you apply for more than one mortgage?

UESprospect - can I ask which bank is offering you the lower rate? There's a good chance that our rate lock will expire before we close so we need to explore other options.

You can apply for more than one mortgage. The bank you end up ditching will not be happy about having done all that work for nothing, but they (should) understand that it's a competitive market. Some banks will charge you the appraisal fee upfront, but the ones I've talked to have told me that they will refund it if you end up cancelling with them before the appraisal happens.

UESprospect - a rate not locked means no rate to me. You're essentially floating your rate which you can do with any lender. You can certainly apply with as many lenders as possible but it will cost you. As far as establishing a relationship with the lender with deposits, it isnt a gimmick. Many banks have relationship pricing. sunny.hong@decapitalmortgage.com NMLS 483661

A mortgage broker can submit your loan application to several lending institutions at no charge. One application can have a locked rate and one can float. And while I do not like to do this, I make my lenders aware that several applications to different lenders have been submitted.

Ellen Silverman
Licensed mortgage broker since 1990
esfundingco@aol.com
NMLS number:60631