While working with some buyer clients this past week, we had conversations with a lender rep from a “big bank” and a lender rep who is with an independent broker. I always suggest that my clients shop the market to ensure they are getting the best mortgage rates and expenses. All borrowers have different situations so generalization is not very useful in picking lenders. Buyers need to talk to several to find out who they are comfortable with and who’s specific business rules work best for the buyer. In this case we found that for an FHA loan, the big bank got different credit scores than the mortgage broker when contacting the credit rating agencies (curious, don’t you think?). We also found that the big bank would work with lower minimum credit scores compared to the mortgage broker.
We at the office have been told by some of the closing attorneys that they are seeing evidence that “the powers that be” seem to be skewing the rules to favor the big banks over the brokers. This experience seems to back that up, although it may be that the smaller funding sources for the brokers have concluded that they have to be more conservative right now to avoid exposure to more losses. No doubt there are many different factors involved that are known only to those who are immersed in the lending world.
For me, I just want to help my buyers get a good loan at a good price and not be talked into something they’d regret later. So the moral of this is that it pays to shop around, not only for best price and terms, but also because sometimes from one lender you get a NO, and from another you get a YES!