May

How do I choose who to get my mortgage through? Major banks or smaller mortgage companies?

I have an established relationship with Bank of America however there are several other smaller banks and lenders out there with better rates. What happens if you get a mortgage through a smaller bank or lender and they go bankrupt or get bought out by another company? Does it affect your mortgage rate? Is that the chance you take or is the rate locked in no matter what?

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Categories : house loans

3 Comments

V(^_^')V
May 6th, 2010 at 3:53 pm

definitely go with the smaller banks or credit unions. they usually offer lower rates. if they do go bankrupt, other banks and lenders will take over your loan. the rate will usually stay the same.

acermill
May 8th, 2010 at 11:02 pm

Understand that smaller banks write loans just as do mortgage brokers. Shortly after you take the mortgage, it will be sold off to another mortgage company. If you want to keep that loan ‘in house’ expect to pay higher interest rates.

In any event, once you take a fixed rate mortgage, the contract is guaranteed at the rate and terms specified in the mortgage contract, no matter in whose hands it ends up.

The idea is to shop for the best rate and terms you can find. It makes no difference with whom the contract ends up. Be very careful, however, of suspicious low rates. You may well find that such rates require you to pay ‘points’ upfront to get a lower rate. Check all the fine print, including all origination fees.

Martin
May 11th, 2010 at 8:47 am

I would be more than happy to help you obtain your mortgage.

I am a mortgage broker. Email me, and let’s discuss your loan options!

I am on line now!