Need advice understanding which loan officer is telling the truth

[Anonymous]

My wife and I will be submitting our FHA loan on June 28th, that date marks our 2 year waiting period from our BK7.  We have made an offer on a house for $272,000 with a 60 day close that was accepted.  We had the inspection done and submitted our earnest money of $1000.  So, we are just waiting for the 28th to officially submit our loan and get our appraisal ordered.

I have submitted our all information to a mortgage broker with Sistar Mortgage, and a Home Loan Advisor with GSF Mortgage and received pre-approval through both (without officially submitting to underwriting).  Our middle score is 680, our income is $163,000, and our DTI is below 25%.  The only conditions that came up were minor ones that I have already submitted information to eliminate them.

One person is telling me their best rate is 4%  with no points, but I can buy 1 point and get the rate to 3.75%.  The other person is telling me I qualify for a rate of 3.5% with no points and I can lock in the rate for 45 days starting today.

I advised the person quoting me 4% that I could get a better rate, I told him becuase honestly I like him best and he is a local guy that I can physcially see in person.  He is advising me that the 3.5% rate seems severly discounted and that even if I lock my rate they can still come back at closing and do a "Changed Circumstance" and force me to take a different rate.  He indicates this is the typical bait and switch when the mortgage compay changes rates right at closing and leaves you with no other options but to cancel the deal and lose your appraisal fee and time, or take the higher rate to close the loan.

So I would appreciate some good advice from some of you experts.  Who is telling me the truth??  Do I lock the rate today and hope it works out, or is the other guy telling me the truth that the rate is just too good for my credit score.

[NC_Mtg_Loaner]

Once a rate is locked, the lender has  3 days to provide you with a Notice of Loan Change for you to acknowledge.  

I can't imagine how a "bait and switcher" can get past that -- much less send you the original Loan Estimate disclosure with that rate (and APR) documented.    Once you receive your original Loan Estimate, the APR can't increase by .125% or they'll be out of compliance.  There isn't a bank in america that's likely to risk that event occurring.

Edited to add:

It's quite likely both are telling the truth @ one point in time at least.....

It's quite possible one lender provided you a quote on a different day from the other which could have resulted in such a spread.  It's possible one is charging additional points (and/or fees) to obtain a lower rate or perhaps the converse--one is providing a lender credit with a higher rate and lower fees?  

You will simply need to compare the Loan Estimates you have received from each.   Just remember when you want to truly compare the two, get your quotes provided on the same day and near the same time.

[Mortgage-Specialist]

Just because your loan officer is unable to obtain theat rate is suggesting it's bait and switch. When looking at the rate sheet, 3.5 is par rate and 3.25 can be obtained by buying it down for just under a point... Your original lender being local has no bearing on your loan. I doubt that you are seeing the loan officer in person, and them being local doesnt help when youre paing an extra $50 per month for the next 30 years for taking a higher rate because theyre local. 

I'm not referring to you when I say this because you are actively seeking the best deal. I see many people choosing local lenders and paying over 5% interest (because theyre local) instead of going with an out of state lender charging mid 3%. It baffles me how so many people will go out of their way to locate and cut out a 50 cents off coupon for shampoo but wont do their due diligence when making the biggest investment of their life....  

Last month a 660 score borrower was offerered a 5.625% rate on a $395k FHA loan by their realtors lender. They decided to go with me instead (high 3's at the time with $0 lender fees) I was literally saving them $425 per month... Either it was the buyers realtor or loan officer but they somehow convinced the buyer to stay with the local lender and get completely taken advantage of. I assume the local lender gave the same nonsensical response to put dowubt in the buyers mind..  This happens quite often and I consider this to be a form of insanity and the buyers end. 

[Anonymous]

Re: Need advice understanding which loan officer is telling the truth
Just because your loan officer is unable to obtain theat rate is suggesting it's bait and switch. When looking at the rate sheet, 3.5 is par rate and 3.25 can be obtained by buying it down for just under a point... Your original lender being local has no bearing on your loan. I doubt that you are seeing the loan officer in person, and them being local doesnt help when youre paing an extra $50 per month for the next 30 years for taking a higher rate because theyre local.

I'm not referring to you when I say this because you are actively seeking the best deal. I see many people choosing local lenders and paying over 5% interest (because theyre local) instead of going with an out of state lender charging mid 3%. It baffles me how so many people will go out of their way to locate and cut out a 50 cents off coupon for shampoo but wont do their due diligence when making the biggest investment of their life....

Last month a 660 score borrower was offerered a 5.625% rate on a $395k FHA loan by their realtors lender. They decided to go with me instead (high 3's at the time with $0 lender fees) I was literally saving them $425 per month... Either it was the buyers realtor or loan officer but they somehow convinced the buyer to stay with the local lender and get completely taken advantage of. I assume the local lender gave the same nonsensical response to put dowubt in the buyers mind.. This happens quite often and I consider this to be a form of insanity and the buyers end.

Your statement is very true, I have never once met the local LO, just emails and phone calls like the other one.