Which type of lending institution is better for a home mortgage; a mortgage company or traditional bank?
I'm not a first time home buyer. What are the pros and cons of using bank financing versus mortgage company financing to find the most competitive interest rates? This is for a home purchase, not refinance and my credit is excellant.
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in terms of competitive rates, your bank is limited to the loans that are in the bank, as opposed to a mortgage company who will have thousands of options to fund your loan.
The pro's of a local bank are the personal contact and you can build a relationship with them, which will encourage repeat business and you will then be able to get better rates from them
As an investor I want to keep my funding as local as possible, find the banks that have very few branches and the want to give me business, as opposed to national banks or brokers that I am only a number too.
try both, then pick the better interest rate.
Right now, with the state of the US economy, it's a 50/50. Actually, I would advise you to join a credit union and get your mortgage through them.
I have found better deals with banks. All will negotiate, it seems bank will make decisions faster.
I believe there are more laws covering the way banks do business as opposed to mortgage companies. If you do your home work and pay attention this shouldn't be an issue.
I would shop them both. I have homes financed with BofA and USAA(available to Military and Dependents). BofA was higher on fees at first, but with a little effort on your part they will reduce them. I am sure other places will too.
As a general rule, it has been my experience that major mortgage loan companies, such as Wells Fargo (not a solicitation), offer lower interest rates than national banks. Credit Unions are very good but you have to closely watch expenses such as appraisals, lawyers, title insurance as these tend to come in higher than from conventional lenders. I have always advised my clients to seek out more than one lender and compare the true APR's and good faith estimates.