3.19 interest rate for 5 years (vs 3.39 most are offering)

[topfiverecords]

We have just been pre-approved for a mortgage and have a 120 rate hold. I'm wondering if I should be negotiating now to ask for a better rate, or wait until we've put an offer on something and are closer to a closing date?

[brocoli]

Originally Posted by topfiverecords

We have just been pre-approved for a mortgage and have a 120 rate hold. I'm wondering if I should be negotiating now to ask for a better rate, or wait until we've put an offer on something and are closer to a closing date?

I always tell my clients to get full preapproval before making an offer an a house. Have everything set up the way you want it, so that when it comes time to making an offer, the financing condition is minimal because it will only depend on the condition of the house. If you are expecting to be purchasing within the 120 days, then get the exact rate that you want. Just makes it easier for you and the lender

[MillerTime GFG]

Originally Posted by topfiverecords

We have just been pre-approved for a mortgage and have a 120 rate hold. I'm wondering if I should be negotiating now to ask for a better rate, or wait until we've put an offer on something and are closer to a closing date?

Depending on who your pre-approval is with, they will automatically give you the lower rate between your pre-approval rate and whatever their best rate is once the deal goes live. (ie - You have an accepted offer on a house)

Some lenders will honor that only at request though - which would be up to your broker/mortgage specialist. Of course, having a pre-approval with a lender doesn't mean you have to stick with that lender if you're confident you'd get approved elsewhere as well.

[topfiverecords]

Originally Posted by MillerTime GFG

Depending on who your pre-approval is with, they will automatically give you the lower rate between your pre-approval rate and whatever their best rate is once the deal goes live. (ie - You have an accepted offer on a house)

Some lenders will honor that only at request though - which would be up to your broker/mortgage specialist. Of course, having a pre-approval with a lender doesn't mean you have to stick with that lender if you're confident you'd get approved elsewhere as well.

They will give us the lower rate if rates go down.

However, for arguments sake lets say they gave us 3.39 on pre-approval and their advertised rate is 3.49.
If I negotiate now, say I get them down 0.1% to 3.29. But what if within the 120 days rates drop 0.2%. They come back and say the original 3.39 is now 3.19.
If I negotiate later, I'm better off as I should be getting 0.1% down to 3.09.

If rates don't drop I can still likely get 3.29. Thoughts?

[albertGQ]

You can get 2.99 right now on live deals.

[Hugh Jahrmes]

I was bored last night checking rates and saw true north or something like that (can't be bothered to check now haha) offering 2.98 I believe. A few sites I was on linked to them showing 2.98/99

I still have three years left and am just hoping things don't go wild between now and then

[topfiverecords]

Originally Posted by albertGQ

You can get 2.99 right now on live deals.

Not with comparable terms, penalties, etc.

[MillerTime GFG]

Was just going to mention the same thing topfive. True North has very competitive rates, as they buy down their rates. They also work somewhat exclusively with a select few lenders, so their product line is very limited. Not everyone will qualify with them, as they don't have the ability to choose between many lender. Things like terms, pre-payment privileges, penalties and all around service level are lacking with someone like True North.

[albertGQ]

Originally Posted by MillerTime GFG

Was just going to mention the same thing topfive. True North has very competitive rates, as they buy down their rates. They also work somewhat exclusively with a select few lenders, so their product line is very limited. Not everyone will qualify with them, as they don't have the ability to choose between many lender. Things like terms, pre-payment privileges, penalties and all around service level are lacking with someone like True North.

True North has many lenders as their disposal. They just choose their favourites. Which many brokers do as well.

The lender True North gets the 2.99% 5 year fixed rate from does have some restrictions (no ports or blends). But that same product is also available to all brokerages too. But those brokerages offer 3.09% for the exact same product. True North's 3.09% rate is the full service one that others offer 3.19% for.

[MillerTime GFG]

They don't have near the same variety as a broker would in terms of lenders. True North made arrangements with a select few lenders to guarantee a certain amount of volume in return for status with those lenders...ie - access to their best rates.

I believe 1st Nat is the lender you're referring to?

[albertGQ]

Originally Posted by MillerTime GFG

They don't have near the same variety as a broker would in terms of lenders. True North made arrangements with a select few lenders to guarantee a certain amount of volume in return for status with those lenders...ie - access to their best rates.

I believe 1st Nat is the lender you're referring to?

They do have a certain level of commitment to certain lenders but the number of lenders that individual brokers use are roughly the same too.

I'm sure you also have a small number of lenders that you consistently go to?

[MillerTime GFG]

Yes, of course I do. See what Dan Eisner (founder of True North) did was go to those select few lenders that they do the majority of their business with and negotiate top tier status with them in return for guaranteed volume. This is why they funnel a huge chunk of their deals through said lenders. The lenders outside of those, they don't have top tier status with, and don't have access to their best rates.

[albertGQ]

Originally Posted by MillerTime GFG

Yes, of course I do. See what Dan Eisner (founder of True North) did was go to those select few lenders that they do the majority of their business with and negotiate top tier status with them in return for guaranteed volume. This is why they funnel a huge chunk of their deals through said lenders. The lenders outside of those, they don't have top tier status with, and don't have access to their best rates.

But lots of small, medium and large brokers also do not have top tier status with all the lenders.

With the way you wrote your post, it sounds like True North is the only one that deosnt have access to the best rates from all lenders.

[MillerTime GFG]

Well generally speaking, the larger the brokerage, the higher the status they have with a larger amount of lenders. I'm not saying that True North is the only one that doesn't have access to the best rates across the board.

What I am trying to say is that they specialize in offering low rates...but I'm not just speaking in my own opinion that they generally aren't known for their overall "full service" and variety of products/product knowledge.

[albertGQ]

Originally Posted by MillerTime GFG

Well generally speaking, the larger the brokerage, the higher the status they have with a larger amount of lenders. I'm not saying that True North is the only one that doesn't have access to the best rates across the board.

What I am trying to say is that they specialize in offering low rates...but I'm not just speaking in my own opinion that they generally aren't known for their overall "full service" and variety of products/product knowledge.

Well, True North is a large broker so they have the same access as all other large brokers.

They specialise in lower rates because they buy down all their rates and deal with volume. That's how they make their money. The products they offer are indentical to what other brokerages offer. They're just at lower rates because they take a hit on the commissions. Something all/most brokerages refuse to do.

I know Dan Eisner is not a popular man in the broker world due to his business model, but it works. Smaller margins but high volumes.

[MillerTime GFG]

They are the Rhino Realty of mortgage brokerages essentially. It's a sound business model, I'll give him that, but no - not overly popular.

Are you a broker with True North? Perhaps you can give more insight then, as I'd be interested to know what their portfolio of lenders looks like. From all the industry people I know, I understand that they don't have the same options...but it's all kind of 'hush-hush'. And if they do have the same portfolio of lenders, I stand firm that they would not have the same status as other large brokerages would.

[albertGQ]

I am not a broker and do not work for True North so I don't know what their portfolio of lenders are. So can't help you there.

From what I know though, they do have virtually the same access as all the other brokers. They just pick and choose what fits best for their clients. They prefer to go with their small trusted circle of lenders, but all brokers do that. When someone has a comfort level with their dedicated underwriter, they tend to work with that person/lender more frequently.

[MillerTime GFG]

Well it sounds like we have conflicting info. Would love to get an actual look at who they have access to. I think you should send them an email asking!

[albertGQ]

Originally Posted by MillerTime GFG

Well it sounds like we have conflicting info. Would love to get an actual look at who they have access to. I think you should send them an email asking!

Meh. I don't care enough to ask. Plus, I doubt they'd give me any info

Maybe you should ask. LOL

[MillerTime GFG]

Well I care enough for you to ask!