Mortgage rate from our bank not matching the news

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latebloomer
Posts: 12
Joined: Fri Jan 16, 2015 4:45 pm

Mortgage rate from our bank not matching the news

Post by latebloomer » Thu May 12, 2016 12:27 pm

Hello,

My wife and I are trying to buy a home and we are having some problems with our bank giving us the best rates.

Details:
410,000 house
20% down payment
30 year fixed rate
We both have credit scores over 810
She makes $150,000 and I make $120,000

We went with a bank our real estate agent recommended and the banker did work late at night to help us get our offer in. The rate sheet in our initial meeting a few weeks ago was 3.875 vs 3.625 we had from other banks and similar fees. We decided to go with them anyways, we didn't have time to look anymore, and the following week asked about the rate difference and got it matched right away. Everything seemed ok, so we continued on with them to buy the house.

We get an email this week asking us to lock in a rate of 3.75 and I mentioned rates just went down two days in a row so it should be 3.58 - 3.625. We get another email today saying the rate is 3.875 and I am finding offers online for less than that. It isn't about the money at this point but more principal of getting the best rate. Maybe I am just being OCD, but it has been a fight to get the best rates from them and I think we are pretty much stuck with them as our bank at this point since closing is only a few weeks away.

I am new to this so I could be missing something. Does this seem odd to anyone else or should I just give up and accept the rate?

bigred77
Posts: 1915
Joined: Sat Jun 11, 2011 4:53 pm

Re: Mortgage rate from our bank not matching the news

Post by bigred77 » Thu May 12, 2016 12:31 pm

If you didn't lock the rate at the time, your at the mercy of current rates.

If you have 3+ weeks to closing, find the best rates online and tell your current bank to match it or take your business elsewhere.

latebloomer
Posts: 12
Joined: Fri Jan 16, 2015 4:45 pm

Re: Mortgage rate from our bank not matching the news

Post by latebloomer » Thu May 12, 2016 12:37 pm

We are less than 2 weeks from closing. The best part was that we asked to lock the rate, but they said we could get 3.625 or less without it. Yes, I know that is our fault.

atlnuke
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Location: Atlanta, GA

Re: Mortgage rate from our bank not matching the news

Post by atlnuke » Thu May 12, 2016 12:40 pm

In my limited experience, real estate recommended mortgage originators have higher rates than best avaliable. Maybe a boglehead person in the industry could educate us on if there are kickbacks involved.

Only you can tell us if $16751 (over 30 years) is worth getting a mortgage from someone else. Will the seller accept the delay, etc.

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Kenster1
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Re: Mortgage rate from our bank not matching the news

Post by Kenster1 » Thu May 12, 2016 1:01 pm

The rates vary a bit depending on who you go with.

In the past when I had a mortgage with Wamu - I went thru a Mortgage broker/banker, which I ended up back with Wamu.

Here's the kicker - I got a better rate going this rate than what Wamu was offering me to refi with them directly.

I think it's because the Mortgage broker/banker can get a better wholesale rate by selling a bundle worth of mortgages for a few million versus the Bank handling just me individually at a much smaller loan amount.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

batpot
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Location: Seattle

Re: Mortgage rate from our bank not matching the news

Post by batpot » Thu May 12, 2016 1:04 pm

In my experience, it's very common for local banks to charge more than online vendors, and if they claim to match a rate, they usually make up for it in hidden points.
It's unfortunate that they convinced you not to lock...hopefully this was not simply a ploy on their part. Given you have only 2 weeks to close, I think they have you.

One thing you could consider is a higher "no fee" rate just to get through closing, and then refi with an online vendor.

latebloomer
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Re: Mortgage rate from our bank not matching the news

Post by latebloomer » Thu May 12, 2016 1:12 pm

batpot wrote:It's unfortunate that they convinced you not to lock...hopefully this was not simply a ploy on their part. Given you have only 2 weeks to close, I think they have you..


That possibility has crossed my mind.

It just doesn't make since rates dropped two days in a row and in those same days they raised our rate each day.

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unclescrooge
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Re: Mortgage rate from our bank not matching the news

Post by unclescrooge » Thu May 12, 2016 1:20 pm

I would ask for a rate sheet.

This will give you a table of all the points/rates available.

For example, you might get 4% with 1% rebated back towards closing costs, or 3.5% with you paying 0.25% in points.

A table will give you all your options, so you can make a better decision.

Also ask for the breakout of lender fees and third party closing costs.

When comparing rates, always compare the APR - this will give you your actual rate after all the fees have been accounted for.

In California you can do a no-cost refi with several banks. If that is an option for you, you might want to look into that if you feel you are getting shafted by your mortgage officer/broker.

NoVa Lurker
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Re: Mortgage rate from our bank not matching the news

Post by NoVa Lurker » Thu May 12, 2016 1:27 pm

batpot wrote:One thing you could consider is a higher "no fee" rate just to get through closing, and then refi with an online vendor.


+1. We thought we had a good rate when we closed on our house six years ago. Since then, we have refi'd twice. In retrospect, we should have tried to do a no-cost mortgage when we bought the house (at a higher rate), and then refi-d later. Certainly, you should not pay points under your circumstances.

We are currently in a 15-year mortgage at 2.625%. In that refi, it took the lender (Amerisave) longer than we had expected, but we were not stressed, because it was a refi and we had no timing requirements (we just wanted to get the lower rate as soon as we could).

delamer
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Re: Mortgage rate from our bank not matching the news

Post by delamer » Thu May 12, 2016 1:36 pm

atlnuke wrote:In my limited experience, real estate recommended mortgage originators have higher rates than best avaliable. Maybe a boglehead person in the industry could educate us on if there are kickbacks involved.

Only you can tell us if $16751 (over 30 years) is worth getting a mortgage from someone else. Will the seller accept the delay, etc.


I believe such kickbacks are illegal, in my state anyway.

I have a friend who is a real estate agent and she recommends loan companies that have competitive, but not rock bottom, rates and excellent customer service. Because of all the things that can go wrong when purchasing a home, she thinks that it is a good tradeoff. This sounds like the OP's situation.

Having had a dragged out, difficult experience with our credit union for a refinancing -- which didn't have the time pressures of a purchase, fortunately -- I understand her point.

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Meg77
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Re: Mortgage rate from our bank not matching the news

Post by Meg77 » Thu May 12, 2016 2:21 pm

latebloomer wrote:
batpot wrote:It's unfortunate that they convinced you not to lock...hopefully this was not simply a ploy on their part. Given you have only 2 weeks to close, I think they have you..


That possibility has crossed my mind.

It just doesn't make since rates dropped two days in a row and in those same days they raised our rate each day.


As a banker I agree, that doesn't make sense. Even if their rates are above average they should move in tune with the market. The banker should be able to give you an explanation of why their rates are not moving with the market - which can happen, usually because a lender is trying to slow down or ramp up loan volume on a certain product.

I highly doubt anybody is trying to mess with you just because you're close to closing. Fair lending regulations are a big deal, meaning banks have to offer the same products to everybody in the same position. Rate sheets are complex and are updated daily if not more often than that, so banks are not in the business of fudging around the quote just based on how many days you have till closing. Your broker/banker doesn't get paid differently based on what rate you get so he has zero incentive - or ability - to offer you anything different from what's on the rate sheet that guides every loan/quote in process on any given day. Usually the bank/company sells the loan off after closing anyway (or if they hold them they are hedging their interest rates) so they don't actually care what the rate ends up being - they make their money primarily from the fee they charge at closing.
"An investment in knowledge pays the best interest." - Benjamin Franklin

edge
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Re: Mortgage rate from our bank not matching the news

Post by edge » Thu May 12, 2016 6:05 pm

Always shop a loan.

This is a transaction not a relationship.

Danzangdc
Posts: 65
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Re: Mortgage rate from our bank not matching the news

Post by Danzangdc » Fri May 13, 2016 9:58 am

Find another lender and get a 15-year loan. You can support it easily on your salaries. Rate will be much lower, and you'll be free sooner.

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