Where do you go for a mortgage? Most people will say “my bank.” Many might haggle a bit or the more adventurous might check out one or two other banks to see if they can get a better rate, then go back and get “their bank” to match it and consider it a win, without comparing the fine print.
That shows a great deal of loyalty to a company that charges a lot of fees and makes money off your money and did not offer you the best deal the first time.
So where else can you go? Well there are other lenders out there that are actually keeping rates low and fighting for your business, but if you are not looking you will not find them.
Who are these other mortgage lenders? They do every day mortgages like yours and they also have a range of specialties, but bank competitors include firms like Merix, Street Capital and many others. These firms have billions of dollars in mortgages and are keeping the banks on their toes. They offer innovative products. And there is no messing around with higher “posted rates.” This latter part is particularly valuable when comparing variable rate mortgages.
Why does posted matter when we are talking variable?
Well many customers ask me if they can lock in the rate if they get nervous about where variable is going. The answer is always yes, but the difference is this. Let me use my own example. I had my mortgage at one of the banks, it was a great product at a crazy rate so why not take it, but when it came up for renewal they had changed the terms and I could not match the rate and get the prepayment options I wanted (I am ever hopeful). The bank told me that if I wanted to lock in then TODAY I could get X% off the posted rate, but in a year's time I could not be guaranteed that I would get X% off. Frankly, at that point they had me locked in so to leave would cost a penalty so I thought what was there incentive to give me X% off, and even the lender said it could be worse. So I moved to a lender where the fixed rate is always at a discount to bank posted and I feel I have the protection from facing too big a jump if I decide to lock in.
These alternative lenders get their money from investors and banks. They have excellent business models and good mortgages that they offer to consumers through the broker channel at great rates. Some other lenders help people with poor credit or unusual properties, other specialize in commercial or storefront. There is a world of choice. Open a new door by talking to an independent mortgage agent and find out how you win.
