Shopping for home purchase loans - internet vs local

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Shopping for home purchase loans - internet vs local

Postby harikaried » Fri May 03, 2013 2:05 pm

Do people have experiences making a home purchase using an internet/national lender, e.g., AmeriSave, National Mortgage Alliance, PenFed, etc? Did you use that to shop for GFEs to negotiate with the local lender? Did you also shop around locally for rates as well?

I just received the GFE and initial fees worksheet for a 20% down 30-year fixed loan from the local mortgage company (recommended by our agent) that provided the pre-approval for our home offer.

The local company's GFE Adjusted Origination Charges shows $3115 where looking at the fee worksheet lists $2100 origination + $1000 underwriting fees as the large items. They provided 4 initial fees worksheets with 2 options of rates&credits and impound/not. They provide an additional $520 credit for paying taxes/insurance through the impound account.

Local: 3.625%, $2335 net lender fees ($780 credit), no impound
Local: 3.625%, $1815 net lender fees ($1300 credit), yes impound
Local: 3.750%, $1295 net lender fees ($1820 credit), no impound
Local: 3.750%, $775 net lender fees ($2340 credit), yes impound

For reference, but probably shouldn't affect the loan rate, I estimate the other settlement charges to be around $4000 with the large items: $1200 owner's title insurance, $700 inspections (home/pest/heat), $550 transfer charges (already split half with seller), $500 appraisal, $500 lender's title insurance, $400 closing/escrow fee.

Looking online, I see that AmeriSave and National Mortgage Alliance have very similar rates with AmeriSave providing about $700 in additional credit. So to compare the local rates vs internet rates with credits up to that of the other settlement charges:

AmeriSave: 3.250%, $2249 net lender fees, no impound
AmeriSave: 3.250%, $1729 net lender fees, yes impound
AmeriSave: 3.625%, $3520 net lender credits, no impound
AmeriSave: 3.625%, $4040 net lender credits, yes impound

So it seems like I could get the same interest rate of 3.625% with AmeriSave that the local company is offering and have no out-of-pocket fees with this purchase. This is as opposed to going with the local company then paying $1815 in lender fees then an additional $4000 in settlement charges.

Or alternatively, I can pay roughly the same lender fees ~$1800 with AmeriSave but get a rate of 3.250% ($905/mo) instead of the local company's 3.625% ($949/mo).

Do people tend to not waive the escrow/impound account to get the extra lender credit -- especially if one is not itemizing deductions -> not prepaying property taxes? Also, how should one weigh the options of no closing costs vs lower monthly payments -- save ~$5800 on closing but pay more $44/mo or $528/yr so ~11 year breakeven?

Edit: For some extra context, our offer agreement has a close of escrow date in the middle of July, so we have some time to talk with different lenders where potentially internet lenders might be slower to respond.
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Re: Shopping for home purchase loans - internet vs local

Postby johnny956 » Fri May 03, 2013 2:50 pm

I went with a internet lender earlier this year. Think I found them through Zillow. Roundpoint Mortgage was the name. I was basically in the same situation as you. 3.750% was the best APR I could find locally and Roundpoint offered a lower rate and less closing costs.


I would look at reviews of the online lender. I was apprehensive about dealing with a out-of-state company (so was our local title company). We scanned and digitally signed all documents and closed in about 30 days with a local title company who had no issues with them. As long as they seem to have legitimate and a decent amount of reviews I don't see why not. I've heard of AmeriSave online but no personal experience with them.
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Re: Shopping for home purchase loans - internet vs local

Postby harikaried » Sat May 04, 2013 11:14 am

johnny956 wrote:Think I found them through Zillow. Roundpoint Mortgage was the name. I was basically in the same situation as you.
Sounds right -- they highlight that they're the most reviewed lender on Zillow. I also found Roundpoint used on other real estate sites like Movoto. Their current rate is 3.500% with $1 fee according to Zillow.

johnny956 wrote:We scanned and digitally signed all documents and closed in about 30 days with a local title company who had no issues with them.
The thing about doing things digitally is actually more convenient for my wife and me as I'm currently at the new location in another state while my wife is finishing up teaching for the school year. So we would probably be getting a better rate and more credits for a potentially more convenient experience.

johnny956 wrote:I've heard of AmeriSave online but no personal experience with them.
It sounds like people often use them for refinances, but I haven't heard much for home purchases. People here generally seem to have a good experience with AmeriSave, but there have been some reports of a bad/unresponsive contact.
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Re: Shopping for home purchase loans - internet vs local

Postby tfb » Sat May 04, 2013 11:40 am

harikaried wrote:Do people tend to not waive the escrow/impound account to get the extra lender credit -- especially if one is not itemizing deductions -> not prepaying property taxes?

Yes. Waiving escrow gives you more control but it's not worth the $$ for that privilege.

harikaried wrote:Also, how should one weigh the options of no closing costs vs lower monthly payments -- save ~$5800 on closing but pay more $44/mo or $528/yr so ~11 year breakeven?

Treat it like a refinance. Pretend you already have the no cost loan. Then calculate if the additional cost to lower the rate by 0.125% or whatever is worth it. There are many refi calculators.
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Re: Shopping for home purchase loans - internet vs local

Postby harikaried » Sun May 05, 2013 6:17 pm

tfb wrote:
harikaried wrote:Do people tend to not waive the escrow/impound account to get the extra lender credit?
Yes. Waiving escrow gives you more control but it's not worth the $$ for that privilege.
Curious, is this something per state or mostly for home purchases or something recent? I've refinanced 3 times in California, but I don't recall this option of waiving or not. I've only heard of this escrow option when looking for home purchase loans in Nevada.
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Re: Shopping for home purchase loans - internet vs local

Postby tfb » Sun May 05, 2013 8:01 pm

harikaried wrote:
tfb wrote:
harikaried wrote:Do people tend to not waive the escrow/impound account to get the extra lender credit?
Yes. Waiving escrow gives you more control but it's not worth the $$ for that privilege.
Curious, is this something per state or mostly for home purchases or something recent? I've refinanced 3 times in California, but I don't recall this option of waiving or not. I've only heard of this escrow option when looking for home purchase loans in Nevada.

Not sure about per state. You can try online loan quotes in different states with and without waiver. It affects refi's too. It's been like this for me for the last few years. I heard Fannie/Freddie charge more if escrow is waived. The lender therefore passes that on. If your loan officer/broker just asked you whether you want to waiver escrow, and most people prefer to waive, you may not know that choosing to have an escrow will save you hundreds of dollars.
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Re: Shopping for home purchase loans - internet vs local

Postby OnBoard » Sun May 05, 2013 10:12 pm

In my experience, Internet fees have been considerably less, but the customer service has been lousy.

I went with AimLoan over my credit union.

Good luck.
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Re: Shopping for home purchase loans - internet vs local

Postby bsteiner » Sun May 05, 2013 10:17 pm

Take a look at the HSH website: http://www.hsh.com/lshow.html . Click on your state in the section "Mortgage Rates by State" in the middle of the page. HSH doesn't get a commission if you use one of the lenders shown.
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Re: Shopping for home purchase loans - internet vs local

Postby Van-Guard23 » Sun May 05, 2013 10:48 pm

When I was looking to refinance our house here in Hawaii, I checked out the Internet mortgage companies like Amerisave and also checked out local competition. In looking at reviews for Amerisave, I was struck by the number of negative postings about them and even though they had competitive rates, I opted to go a different route. The local company was a bit too expensive when I compared it to another company located in California that I found thru Yelp (if memory serves me right). I went with them (Mortgage Capital Associates) for my refinance back in 2012 to move from a 30-year 5.125% to a 20-year 3.5% fixed. I am looking at them for another refinance to go to 15-year fixed at 2.5% with no points.
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