Big banks vs small mortgage lenders

[neptunejcw]

I'whtrying to figure is it better to get financed through a big bank of small local mortgage company...Which is better & why??

[TimeToRecover]

This question comes up alot.  I am going to post from my opinion.

Big banks are a pain to deal with.  all I will say there.

I reccomend going with a mortgage banker (not broker).  The advantages that a mortgage banker can bring is that they have internal underwritting.  I have found that the mortage bankers are more responsive etc.  Note that a mortgage banker can do everything a broker can do + more.

I do not have experience with the credit unions or portfolio lenders.

you can shop around you don't have to go to just one lender.

[Anonymous]

Adding to "TimeToRecover's" comment... odds are good for non credit union generated mortgages the small banks package the mortgage and sell it on the secondary market. Sometimes after twenty-four months (track record of performance is established) with some posters finding their mortgage sold as they close the loan. Larger lenders Wells Fargo and Bank of America may hold or sell the mortgages depending on their balance sheets. Placed my mortgage with a local bank where the mortgage lender was very user friendly and got me a great rate (need to shop rates).

[Anonymous]

What is a mortgage banker? I still dont understand the difference between a mortgage banker and lender.

When you say big banks, do you mean like Chase, BOA etc?

I am in Chicago area, what would a mortgage banker be in a chicago area?

What I mean by the above is, can someone give me an example of a company that is a mortgage banker, so I can understand better.

Thanks

[Anonymous]

In Minnesota you can work directly with a "Mortgage Loan Originator" that is registered with the State of Minnesota (required to meet certain standards related to the mortgage industry). They can work with a client from beginning to end. Generally they work with assigned lenders or nonbank lenders. They have the authority to do most everything (they are not mortgage loan underwriters). We also have Mortgage Brokers that shop for lending sources and then get paid to put the borrower and lender together. For myself, I shopped rates and got estimates at different credit score levels for the cost of a mortgage in advance so I was more informed and to try and not get "hoodwinked by some fast talking salesperson." Some pre-shopping can even be done online today. Realtors selling properties often have financing connections to facilitate a look at what amount a person can borrow at what rate and will assist with financing. Chicago is a big place and the State of Illinois may be different laws on mortgage lending so my findings are informational at best. As you are very aware the big banks Wells Fargo, Chase and Bank of America deal with much of the mortgage industry (may work through other lenders so the name does not come up). Non Bank lenders could be Quicken, Lending Tree, Pacor Mortgage Corp and a "Google" of the Chicago area mortgage lenders yields many home lenders other than most banks and credit unions there are many out their. You may even find if your looking for info (I did) attended home purchasing community education class. Why, there are some slick talking mortgage sales people and I needed to have a handle on the game. Many online resources will give you ideas of the current rates for FHA, First Time Homebuyer, VA, Conventional 10, 20 or 30 year with ARMS and so on. A good Google search chases up a lot of rates. So you have sense for the market. As to credit score requirements and so on, that is a moving window and some scores are fixed for USDA, Famers Home, VA, FHA and the like (again they can change). At one time when I went for my loan the minimum FICO Score was 620 and it does vary with the market and lender. There is a mortgage expert poster way more knowledgeable than I that looks to help people when the posting is under mortgages which this is. Other posters chime in!

[Legal_Girl]

I went through my credit union, Navy Federal CU and that was one of the best decisions I ever made.  It was the smoothest process in the world and no glitches.  If you don't belong to a credit union, it wouldn't hurt to call around to some that you could get in with and see what they offer.

Regardless, good luck on your future home.