Worst high priced mortgage lenders, and why

Here is a basic list of some of the worst mortgage company choices, and why:

YOUR BANK

Your bank is generally a poor mortgage company choice because they understand that you believe they are your friend. Simply because you've had a checking account there for years, many people believe they will treat you better, and give you a good deal. The reality is just the opposite. Because they know you are already comfortable with them, you are not likely to shop for a mortgage loan elsewhere. The reality is this means they know they can get away being higher priced. They also have higher expenses, like advertising and all the buildings they own, so their margins need to be higher.

BIG INTERNET LENDERS

Just because you've seen them on TV or hear their radio advertising a million times saying how Quick In Loans they are, does not make them a good choice. Actually what makes them a bad choice is because of their advertising. You see, all lenders get their money from the same source on the same day at the same time.  All lenders have essentially the exact same closing costs, and all lenders are basically going to underwrite to the same guidelines. If they spend millions of dollars everyday advertising, and I don't, who needs to have a higher profit margin?

YOUR REALTOR'S IN HOUSE LENDER

Real estate companies over the past 15-years or so have all started adding their own mortgage divisions. Most aggessively push their Real Estate Agents to get you to use their affiliated companies (mortgage and title). They typically use convenience (they are across the hall), or fear (other lenders won't close on time) to get you to use their internal mortgage company. Rarely is the Real Estate agents internal mortgage company the best mortgage company choice, because again, they know you are now less likely to shop when your real estate agent strongly suggest the in-house lender.

GOOD VERSUS BAD REALTOR REFERRALS

It is completely OK for your real estate agent to suggest a mortgage Loan Officer to you. But if they are suggesting their own company, be very suspicious of their motivation for doing so. If they are suggesting an outside mortgage company, it is usually because they know, through experience. that this Loan Officer does a great job, has low costs, and great interest rates.

Even if a Real Estate Agent is truely concerned about you getting the best deal - the owners of their in-house lender only care about profits, so be sure to ALWAYS get  second opinion before committing to your Real Estate Agents own mortgage company.

BEST MORTGAGE LENDER CHOICES

Generally speaking, your local mortgage broker, or local direct lender is going to be the best choce. These Loan officer are required to be fully licensed, while the bank, credit union, and the mortgage companies owned by banks or credit unions do NOT have to have licensed Loan officers. Ask yourself. Do you want to work with a licensed loan officer, or an unlicensed loan officer? The law requires brokers, and non bank lenders to be held to a dramatically higher level of standards than banks.

Next, they generally offer the products of many lenders, not just one, giving you access to many more loan options, and less overhead to pass along.

Finally, the biggest reason to shop a mortgage broker is they generally the lowest interest rates and closing costs in the market because they have to!  They are often NOT your first mortgage company choice. Most people call their bank, or blindly go with whoever their Realtor suggest. There is really only one way for them to get your business away from the bank or realtor's in-house lender.  They have to do it better, faster, and cheaper.

Be sure to shop with your local MN, WI, or SD mortgage broker for the best mortgage rates and costs.