April 2019 by Ben G.
My experience is that the agent took a lot of time to explain to me mortgages. In doing so she spent about an hour explaining them and emphasized how confusing they were and how it was really important to get a local lender so they could walk you through the process. As far as I can tell, the motive behind this was justify a mortgage rate that is higher than competitors - particularly compared to online options. While I understand the strategy from a self-preservation strategy, it's simply not true. I suggest you read a couple of articles on mortgages. The paperwork certainly takes a professional, but the premise and rates are not hard to understand. Any reputable mortgage lender can guide you through this process. They also emphasize customer service and how they'll be there for you. While that may be true, your mortgage is more likely than not going to be sold, in which case your customer service will be handled by whoever bought your mortgage. Calculate the difference between the rate they are offering vs competitors in terms of total price difference you'd expect to play over the life of your loan. For me the difference between Homestreet and the vendor I chose (online vendor called loanlock) was literally over $20,000. That's insane. Here are the other few arguments I promise they'll use to justify using a local lender vs an online, lower-cost alternative (1) Closing time is quick - this is incredibly important in a competitive market. This argument is ABSOLUTELY true. However, they don't offer an advantage here. I closed in under 3 weeks with an online vendor. Lots of companies can close quickly. (2) They use an A rated appraiser. Appraisers are rated, it is important to get a good one in this market. Fortunately, homestreet doesn't have a monopoly on A rate appraisers. Ask other lenders you're considering. The majority will also only use A-rated appraisers. My appraisal came in exactly where I expected. (3) In a competitive market, you need to waive financing contingency which with an online lender puts you at risk. This isn't true. No one is concerned about big mortgage companies, including online ones, not being able to finance. There's no reason to waive financing. You probably need to waive inspection contingency - which means you need to pre-inspect (this is irrelevant to this conversation, just general advice). I know that you don't need to waive financing, because I had two bids that came in higher than me and I was still selected due to my ability to close quickly and earnest money deposit. Also, they'll likely throw around something similar to an argument about would you rather have a product from Walmart or Nordstrom. In this analogy, their stance is that they are Nordstrom and their competitors are Walmart. When they sent me this analogy, I knew I was done with them. It's an awful analogy. First of all, I would not spend $24,000 more for the experience to shop at Nordstrom rather than Walmart and end up with the identical product (the house doesn't change). Secondly, the comparison between them and an online lender wasn't like Nordstrom vs Walmart. The only difference was the online lender didn't waste my time with irrelevant sales pitches, analogies and scare tactics about me losing my earnest money deposit. They earned my business by having the best rate, communicating effectively and quickly, and offering quick closing times. I closed in May, 2018 in an extremely competitive market. I saved about $24,000 in interest payments and $5,000 in closing costs by avoiding HomeStreet. I encourage you each to shop around and do your due diligence.
