| Mortgage lenders (in general) are only as nice as they feel they need
to be to get your business. At times when they've got lots of money
and few customers, interest rates will drop and so will the amount of
hassle one has to endure. When the converse is true, lenders will
become VERY picky.
I've refinanced my home twice since I bought it in 1981 and had to go
through widely varying ordeals. In 1981, interest rates were sky high
(17.5%!) on 30-year fixed mortgages. Qualifying was a real problem for
mere mortals, and there was virtually no flexibility in the percentage
rules because lenders were reselling mortgages on the secondary market
rather than holding them in their own portfolios. Having been turned
down by a couple of banks, we were able to find financing through
Malmart Mortgage Co. (which has since fallen on hard times).
A year later, interest rates had dropped dramatically and my employer
(which had been providing a 6% interest differential payment) exercised
its right to request me to refinance. I used my VA entitlement to get
what may be the only VA mortgage Homeowners Federal Savings has written
in the last decade. (A word to the wise, DON'T BE A PIONEER! It took
three months to get a commitment letter and another year before all the
paperwork was satisfactory to the V.A.) Homeowners was a bit nicer
than Malmart had been, but they were also basically inept.
Interest rates dropped again in 1987 and lenders actually started
scrambling for business. This time, Homeowners sent me a letter with
an offer I couldn't refuse. They would guarantee 5-working-day
turnaround on the application (to commitment letter or refusal), AND
the documentation requirement was greatly simplified (my most recent
pay stub, plus the last two months' bank statements), AND I could lock
in the interest rate at application. (This last feature was even
better than I'd expected. I thought it would cost me 1% to guarantee
my rock-bottom 8.625% rate, but it turned out that the 1% was counted
as part of my closing costs so the guarantee only cost me the INTEREST
on the 1%.)
I have no serious complaints with Homeowners, and I would do business
with them again. Bankers tend to be one-dimensional thinkers, so it's
worth your while to make sure you've anticipated their every desire.
For instance, don't overvalue your estimate of your home's value. The
commitment letter could be conditional upon it appraising to the value
you give rather than the value they REALLY need it to be worth to
satisfy the ratios. (I fell into this one by estimating my home at
$275K on a loan of $73K; when the appraisal came in at $250K, there was
a real possibility that they'd reneg on the commitment because the home
wasn't valuable enough. I trust you get the gist.)
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| Though I'm sure you will find an incomplete rehash here over time,
this topic has already been discussed in detail, in other notes in
this file (dir/title=mortgage) and, more generally, in
TALLIS::REAL_ESTATE. My impressions as a long time reader of these
files are that you can always do better than DCU. Two (of many)
well-recommended places are coop bank of concord and northern mortgage
in boylston. the differences between banks and mortgage companies are
also discussed in detail in REAL_ESTATE
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