What are your thoughts on shopping for mortgage rates?

[Goldy]

My wife and I are being relocated to Utah where a rental similar to the one we are currently living in would cost $1000 more per month so we are looking into buying. We are looking in a conservative price range but since this is our first house I need some help with picking out a lender. Wells fargo rates are close to 4.3% but there are other banks that offer much lower rates like ING. ING has a 30 yr loan that is renewed every 5 years and has rates in the low 3's. Are there any drawbacks to getting a online loan instead of a brick and morter loan? Thanks for your help!

[PMMM]

I would shop using a broker. They are not tied to any lender and shop many different lenders to find you the best rate based on your needs and qualifications. Personally I like dealing with local people that I can talk to and see. I don't like the impersonal touch of the internet. I recently refinanced and was going to go with an online bank but I was able to get the same rate through a local broker that I could see and talk to face to face. Don't forget credit unions as well. A friend of mine just got a new home loan through a local credit union and got a great rate.

PMMM

[disneysteve]

I have absolutely no problem dealing with an online lender. In fact, I'd highly recommend it. We just closed a refi with Quicken Loans, the 2nd time we've done a refi with them, and it couldn't have been easier. Everything was handled either online or via fax and they came to us for closing. We literally had closing at our kitchen table.

I don't understand the ING deal. If it is a 30-year loan, what is there to renew?

I'd go with the lowest rate and best closing costs. Most likely, that will come from an online lender but shop around and see what you can find.

[disneysteve]

Personally I like dealing with local people that I can talk to and see. I don't like the impersonal touch of the internet.

We were posting at the same time.

Different strokes...

I have absolutely no desire or need to handle a simple financial transaction in person when I can do it online. With Quicken, they do assign you a dedicated rep for your loan and I spoke to my rep by phone numerous times but it was from home or work or wherever I happened to be. I didn't need to make an appointment or travel to a particular location.

[Goldy]

The ING loan is as far as I can tell, a 5 year loan based on 30 year payments with renewing rates every 5 years. The current rate is 2.99%. At the end of 5 years you have the option to either pay the balance or renew with the new current rate.

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How much are closing costs on a loan usually? How about for a 230k loan?

[disneysteve]

I would not get a 5-year loan unless I was 100% positive I could pay it off in full in 5 years. Rates are sure to climb - they can't get any lower. This is the time to be locking in a historically low rate for 15-30 years.

I have no idea about closing costs. Perhaps someone else can answer that one. Or contact a lender and ask them. Put in a request for info at Quicken and a rep will contact you. I'm sure they'd be happy to answer questions before you make any commitment.

[briandownie]

I have a few thoughts about your move.

You definitely can negotiate your mortgage rate. Most banks are willing to discuss the rate to get your business. Sometimes if you have a substantial down payment it can really help too because the risk is less.

I don't have a mortgage with ING but do have a line of credit and do have friends with mortgages there. Never a problem.

No disrespect to PMMM but I wouldn't use a broker unless they are going to find you a lender without charging you a fee. You can do your own shopping and unless your circumstances are unique you can do
just as well for yourself. A long time ago when I bought my first house I spent $200 in fees and the results were no better than I could have gotten myself. I'd hate to think what they charge now.

Last thing. Unless you're sure that this move is going to be permanent and you're happy with the arrangement I would hold off on buying and test the waters. When I was young my family moved into a new city, bought a house, and then moved back to our home town again a year later. My parents lost a ton on Realtor and legal fees. I have to mention that when we went there we thought it was for good but obviously didn't turn out that way.

Best of luck on all counts!

Brian

[NJDebbie]

Try Lendingtree.com.

[Goldy]

I would not get a 5-year loan unless I was 100% positive I could pay it off in full in 5 years. Rates are sure to climb - they can't get any lower. This is the time to be locking in a historically low rate for 15-30 years.

I have no idea about closing costs. Perhaps someone else can answer that one. Or contact a lender and ask them. Put in a request for info at Quicken and a rep will contact you. I'm sure they'd be happy to answer questions before you make any commitment.

I won't be able to pay it off in 5 years but I will be moving in 5 years and probably in 4 so my thought was to lock in to the lowest possible rate. I'll be paying biweekly with an extra 500 bucks per payment to maximize paying down principle. Since we are renting now we have been saving the difference between rent and mortgage so our budget is accustomed to that payment.

[Goldy]

Duplicate post

[Kris Jarczyk]

Shop for rates and closing costs. Would recomment fixed rates only. It is your financial future and you are in control!

[fiscallyprudent]

Shop for rates and closing costs. Would recomment fixed rates only. It is your financial future and you are in control!

Couldn't agree more. When I bought my first home i talked to three lenders at the same time and let them know I was in contact with all three. Essentially they engaged in a "beating each other's rate" battle, that was very advantageous for me as the consumer.

Over the course of your mortgage a quarter of a percentage point less could mean savings in excess of $25,000.

[krantcents]

I have used bankrate.com as a way to compare what is out there. Remember, if you have a good FICO score you can negotiate. I would avoid a loan that would renew/reset in five years. I think we're at the bottom of interest rates. I would look for a fixed rate unless you plan on moving in 5 years.

[Drac]

I have always got the best rates using mortgage brokers. When I have been on the market for a mortgage for an investment property, my strategy is to work usually with three different brokers. Once I get a quote from each of them, I let the other two know what is the lowest rate that I have received and as if they can do anything better. This has worked great for us on the last two houses we have bought.