Back in my Wamu days (a tad over a year ago), the playing field for mortgages was pretty level.  Washington Mutual had programs for almost every situation, and Wamu rates were about the same as the rates offered by Wells Fargo, Chase, First Horizon, and most loan brokers.  I was happy to offer the best value for my clients by mixing a competitive rate with great service. 

Once in a while a customer would call and say, "Bob, another lender quoted me a rate much lower than yours." 

My usual response back then was, "Well, check it out if you'd like, but all lenders offer roughly the same pricing because we all sell to the same secondary market buyers.  I'll bet the other lender just didn't explain their loan fee or closing costs."  Usually, the customer would call back after getting the whole story and they'd agree - all lenders in the past offered very similar rates and very similar products. 

Not any more. 

A funny thing happened along the way to credit crisis - it's every lender for itself.  Most lenders are severely constrained by an essentially empty vault; if the lender can't sell the loan to Fannie Mae or Freddie Mac, many simply don't have the extra capital to offer a "portfolio" loan at a competitive rate.

There are lenders that play the game differently.  Some banks make up their own rules, lend their own money, and offer rates that may slaughter the competition. 

Guess what?  I keep an "omniscient eye" on these lenders, and can find the perfect match for you!

Here's an example.  As I write this, I can broker a $750,000 purchase loan to Wells Fargo on either a 30 year fixed or a 5/1 ARM, or I can source the loan through a portfolio lender with a healthy appetite for jumbo loans.  Look at the difference:

            Wells Fargo Brokerage - Fixed:  8.75%, 1.5% loan fee

            Wells Fargo Brokerage - 5/1 ARM:  7.625%, 4.0% loan fee

            First Horizon brokerage source - 5/1 ARM:  5.375%, ZERO loan fee

You read correctly!  A Wells Fargo jumbo loan will be in the high 7's or 8's with high loan fees, and our lender may give the same buyer a 5.375% rate with no fee!  Rates are subject to change without notice, and the example above is neither an offer nor a loan approval.

What's the catch?  The requirements for this low-rate example are tight.  Full income documentation is required along with a large down payment, high cash reserves, a 700 point or higher Fico score, and other restrictions.  In short, it's tough to qualify, but if you do qualify, the savings may add up to hundreds of thousands of dollars!

Don't assume one lender has all the answers!  In the past, a borrower could reasonably rely on one big-bank loan officer for almost any home loan need, and could trust him or her to offer a competitive rate.  Now, it's vital to get a second opinion or find a lender with multiple lending resources.  I'm happy to be the latter, and I'll be happy if you shop around, too.  Because if there is an even better source out there, I want to know about it!