Most people search for interests rate online like they do anything else. Because of this, some companies spend a significant amount of money marketing their rates online. However, just because a company is able to spend enough money to get at the top of a Google search, does not necessarily mean they offer the best rate. This makes shopping for an interest rate difficult and often times intimidating. We will show you the basics of what you need to know to make sure you get the best interest on your mortgage.
Finding The Best Mortgage Lender in California
The first thing you need to do is identify who you are getting your rate information from. There are pretty much 3 places for consumers while searching for the best interest rate.
- Retail Mortgage Companies – These are your traditional big box stores like Bank of America, Chase, Wells Fargo, Rocket Mortgage, Loan Depot, etc. Before the internet the big banks owned the mortgage industry as they were the only place to go. This allowed them to provide subpar service, lack of attention to detail and often higher interest rates. Although they have improved their interest rates, they still have not been able to get over the hump of referring to their clients by their names instead of their file number. Mortgages are very much like snowflakes, no one is ever the same. This is why a lot of times borrowers will not be able to get creative solutions specific to their scenario from large retail companies. Lastly, if you see these company names on the side of a stadium or in a Super Bowl ad, it is safe to assume they are not offering the best rates in the market place.
- Direct Lenders – These are companies who have loan originators that sell their particular products and rates. Some common direct lenders are Sierra Pacific Mortgage, Amerisave, American Financial Network, etc. Direct Lenders are a huge improvement to customer service and acting more as a mortgage advisor than retail lenders. You can find these lenders online and most often in your home town, as many of these companies have branches in local communities ran by local business professionals. They are often available outside of normal banking hours and are willing to take the time to educate and advise borrower’s on their mortgage. The issue with direct lenders, is they are basically just a mouthpiece for own company. So as a consumer, if the direct lender’s company does not offer loans on manufactured homes, then they cannot help you. The easiest way to explain this is that if you walk into a Domino’s Pizza, you cannot get Pizza Hut if you wanted to. In addition, the direct lender business model produces higher interest rates on average. The reason being there is that for every loan originator there is a manager, a branch manager, a sales manager, a regional sales manager and so on. This leaves a lot of hands in the pie before the rate actually gets to the consumer. So although direct lenders are able to give you better than average care and service, they do not have the best interest rates.
- Independent Mortgage Brokers – These are mortgage professionals who have access to multiple investors on the wholesale mortgage market and are able to shop loans and products among all of these investors to find the best product and pricing for their clients. Brokers often have wholesale relationships with retail lenders like the ones above and direct lenders, plus wholesale lenders that only work mortgage brokers. This is a huge advantage when it comes to servicing the consumer. Mortgage brokers can sell you a pizza from Dominos and a pizza from Pizza Hut! Brokers share many similarities with Direct lenders when it comes their ability to provide the personal touch that has been lost with internet sales. Again, face to face meetings, working with locals in community instead of some guy in cubicle in some huge office that you will never see in person. In addition, brokers have nearly nobody standing between them and the money they are procure for their clients. Obviously, they have the normal costs of running a business and do not work for free, but without anyone else to “pay” along the way, they are able to offer the most competitive interest rates in the market place.
As you can see there are a number of different people that you will run into while looking for a mortgage, but pretty much all of them fall into these 3 categories. From our experience, it is wise to look for a mortgage broker. They truly do work for you and are only going to benefit if you do. They have the ability to find creative solutions for unique scenarios, offer nearly every product available and all the while offer the most competitive interest rates.
Contact Your Mortgage Specialist in California Today!
If you would like to get more information on Retail Lenders, Direct Lenders and Mortgage brokers please take this quick assessment to find out which is best for you!
- Do you want the lowest interest rate?
- Do you want personal care an attention to your mortgage?
- Are you looking for creative solutions to your mortgage?
- Do you need your lender to be available outside of normal business hours?
Contact Granite West Funding at (559) 540-2275. And we will help you to find the best mortgage lender in California.