Navy Federal for a mortgage or should I be referred to a local bank through a realtor?

I had started the process of applying for a mortgage with navy federal but have not had them put the package through for pre approval yet. A colleague of mine suggested that we use the realtor that he and several of my coworkers have used to buy their houses. He said that this man referred them to a bank from which they got their mortgages. He said it was easy and there wasn't much he had to pay out of pocket besides the inspection fees (we are using the VA loan)

Also, my NFCU mortgage rate is estimated to be 4.125%

So, my question is, should i continue the process with Navy Federal Credit Union or should i switch to the realtor and go from there? and why? also, is this interest rate high?

Thanks so much for your help everyone!

3 Answers

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  • 8 years ago
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    I would stick with NFCU. They know how to get a VA loan done and I'd bet their rates and costs are lower.

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    Never go through a mortgage broker unless you have marginal credit, self employed, or a problem showing/proving income. In these cases a mortgage broker can be helpful in finding a loan. They will shop your loan to a lender that is more comfortable making marginal loans decisions......of course the mortgage broker will charge you higher fees for their trouble. Mortgage brokers are nothing more than middlemen adding another level of costs to your loan.

    People that don't have credit problems or special circumstances should use a Direct Lender. Direct lenders don't have middlemen and make their own loan decisions. Hence, their loan fee's are generally lower than a mortgage broker. I would avoid the major banks like BofA, Citibank, Wells Fargo (all are direct lenders) but their customer service is terrible and take much longer to process their loans. Go to a smaller local direct lender where their loan processing/underwriting is done in the same location. Even some direct lenders the processor and underwriter are the same person which really speeds ups the loan process.

  • 8 years ago

    You're better off to shop around. You don't have to go with the lender who preapproves you. That's just to see if you would be able to afford the mortgage you're thinking of getting. Just don't lock yourself into the credit union quite yet for the actual mortgage.

    What your colleague is suggesting is that you go through a mortgage broker. This is a person who takes all of your application information and then offers various mortgage products from a variety of lenders who sends him rate sheets every day about what is available. I have a friend who is a real estate agent and mortgage broker. If someone is looking to buy a property, he is the buyer's agent. He also then sets up the mortgage, kind of like a one-stop shop. And, a mortgage broker gets a commission from the lender at close of escrow (that's how they make their money). So, they can often roll some of their commission back into the loan fees to establish a low- or no-cost loan for the borrower (that's how those no-cost loans work).

    But, a credit union usually offers terms that are as competitive as any other lender (they are non-profit entities). So, see what your credit union can do for you and what the mortgage broker can do for you, and then make your choice. And, don't worry about making anybody feel bad for processing your loan application, just for you to go elsewhere. That's their job.

  • 8 years ago

    Navy Fed has several advantages across the board. The biggest is that they understand veterans. If the realtor can show you on paper that you save at least 10k by going with him, then fine. Chances are though that he can't do this, so I'd stick with Navy Fed.

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