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Originally Posted by el ess X
To go on a tangent a bit, the thing about the gubment and banks wanting to cut out brokers and alternative lenders makes me a bit ill. I did a research paper on this in college. You'd be surprised, but probably not, at what they're up to. The banks are behind it all, wanting a monopoly on lending but won't, or can't, do it by offering better goods/services. They want it to be legislated in their favor. Getting rid of a broker who basically gets paid by "kickbacks" of sorts, means the banks get a bit less to get the business. So if they can get rid of that middleman...
Also, the banks want to act as if it's in YOUR best interest to get rid of alternative financing, aka payday loans, stuff like that, but it's really not. The need for alternative financing is there because banks won't lend to those who use other means. And this cuts out YOUR freedom of choices as a consumer. Big banks suck. Plain and simple. Whichever you choose, make sure you know the terms of the agreement before you sign. As long as you know the score, you have control.
If you can get something done through your Credit Union or other means, do so. If you can avoid dealing with the bank initially, you'll likely be further ahead. I've used a lending broker both of the last two times and they've got me a better deal than my own friggin' bank would do. Sure, some major bank usually buys your contract later as you have no control over that, but they have to do it at existing terms. So ours ended up with Chase, but when I asked Chase to begin with, their rates sucked. Unless you got someone working on the inside at a bank to help you out in getting the best the bank has to offer, that'd be the last place I would go for a loan.
But it pays to shop around. FICO knows if you're grouping inquiries to mortgage companies. So don't worry too much about the FICO score hit you take if you research loan rates for a couple of weeks, it won't be much of one as they count it as one.
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What you are failing to realize is that the "gubment and big banks" are not trying to eliminate LEGITIMATE brokers but rather the fly by night ones that "trick" a buyer into hidden fees so as to pad their own pocket, such as on points, higher rates than necessary, and bogus junk fees. The "gubment" (not big banks but rather government entities such as fannie mae and freddie mac and the like) are the rule makers and the big banks and little banks and credit unions etc all have to follow the rules.
Not more than 5 years ago it was not uncommon for someone who did not need a mortgage cuz - lets face it, they didn't have two pennies to rub together and no windows to throw them out of and they owed money to everyone and their brothers and wonderful 540 credit scores because then never pay anything on time if at all - were getting approved for loans cuz hey! everyone should be able to own a home. Now look what that mindset and lending practice has done to our housing market and economy. Not to mention the many masses that were gouged with 8-13% interest rates charged by those wonderful brokers and correspondent lenders......
I myself as a homeowner have a wonderful $45000 reduction of value in my home because of all the foreclosures in my surrounding area because of the prior lenient lending laws, so I have no comps to substantiate my real value. So I, as someone who can afford my mortgage and actually pays it instead of defaults on it, gets to suffer as a result....
Sorry; I will get off my soapbox. I just hate when someone defends what has contributed so much to the downward spiral of our economy.