Long story short: I have a pre-approval offer from Chase for a rate of 4.375% (without points) for a 30 yr fixed. The closing costs are considerably lower than other lenders I talked to, partially because they have an agreement with my employer that gets me a $750 discount in closing costs, plus 75,000 UR points since I have the CSR.
Quicken comes in, which is offering me a higher rate (I could get to 4.375% by purchasing 1 point or so). When I tell them that I’m getting a 4.375% with other lenders without points they pretty much tell me the bank would be losing money at that amount given the current value of the rate the banks they use to calculate the rate they give you, and then tells me about how big banks usually sell their mortgages and they don’t do that. I still need to make numbers to see which one actually ends up being cheaper. But I have two questions:
1. Is what the loan officer from Quicken said true? As in... Do banks offer rates that are too low to attract customers?
2. Apparently Quicken never sells their mortgages. What about Chase? While I understand it’s not the end of the world, I bank with Chase, so
having the mortgage with them would be a plus for being convenient, but that advantage is gone if they sell my mortgage 3 months after closing.
A good chunk of "call center LO's" (Quicken, DiTech, etc.) will say just about anything to convince you to go with them. If your scores are 740+ then with a conventional loan the interest rate you've been quoted by Chase is realistic (and a good mortgage broker could also go through Quicken's Wholesale division to get you a better rate/fees than you could get going to Quicken dirctly).
#1 - not true, what the loan officer said doesn't even make sense.
#2 - I've seen both Quicken & Chase borrower's loans get their mortgage's servicing rights sold to other mortgage lenders afterwards, although Chase seems to sell their servicing rights more often. There is something called the Servicing Disclosure Statement that you'll receive in the initial disclosure package which indicates if they might sell the servicing rights after closing. The box with the verbiage: "We may assign, sell, or transfer the servicing of your loan while the loan is outstanding" is almost always checked with every mortgage lender.
It is a conventional loan (30 yr fixed. I’d be putting down around 25-27% as down payment. The credit score they pulled is 730 for me and 770 my wife). As for the Quicken representative, while polite, he was borderline aggressive when he provided his reasoning stating that a 4.375% with no points is pretty much impossible given the current rate for 30 yr, and that the bank would be making no money. I might try calling again and talking to a different agent and see what they have to say.
Obtaining a mortgage isn't Rocket Science.
I certainly wouldn't have any idea HOW any other lender other than the one I work for can offer a client whatever they say they are offering, but you will find that most lenders will sell the servicing rights to all of their loans as it's just another revenue stream for them.
I always recommend that a client go with whomever gives them that "gut feeling" of confidence. The last thing you need is a lack of confidence with your loan originator.
Lenders will be competitive as this is a competitive field and while what Chase is offering sounds too good to be true you will want to be sure you can "lock that rate ASAP" if you are indeed ready to move forward because market rates can often change twice a day and you don't want to miss out on your great offer from Chase.
There's some spurious tactics used in loan origination, while it's not malfeasance, the Chase offer is legit and there's really no need to continue the discussion with Quicken. Regardless of which loan agent you talk to, you're going to get the same rate and the story about other lenders really is irrelevant.
FWIW depending how things sort out in the next few months I may be working, again, for a bank... even then when it comes to loans if it is mandated to move to the Bay Area it's going to have to be a pretty sweet discount for me not to go talk with Chase again between the bonuses and their currently competitive rates.
Admittedly not likely to happen when I'm probably going to demand a Bay Area downpayment on an equivalent domicile as a signing bonus, pre-tax of course haha.