5 ms·

We looked at financing through some of those new 'hip' lenders. My wife works for Google and SoFi had some of the highest rates (even with 'Google discount' and

by tinbad 10y ago

We looked at financing through some of those new 'hip' lenders. My wife works for Google and SoFi had some of the highest rates (even with 'Google discount' and 10/20% down). They may get your pre-approval within a day, but in reality most lenders get that done quickly. In the end, they have to play the game everyone else is playing and it means long turnaround times to actually close. This is the part that is fundamentally broken and really in need of 'disruption'.

fsckin 10y ago
Just bought my first house a couple months ago. Despite picking a lender that seemed to have their ducks in a row, I wound up 'at the table' from 9AM to 6:45PM. Everybody involved was surprised it actually got done. Fundamentally broken is an understatement.
- tcoppi 10y ago
  We bought a house last year with a credit union, and everyone during closing was quite surprised that we actually closed within two hours of starting. Apparently it is not unheard of for mortgage lenders to be doing final approval up to the day of closing, and keeping people on hold/not answering phones while you and the seller are sitting there twiddling your thumbs.
  - ryandrake 10y ago
    This is one of the reasons why a seller would accept an all-cash offer significantly lower than a competing offer where the buyer requires financing. No seller wants to wait around for a lender to figure out how to do the one thing they're being asked to do.
    - markvdb 10y ago
      Hah. Only days? In Belgium, it takes three to four months. Plus about 15% of the purchase price in taxes, sky high monopoly notary fees and more.
  - sokoloff 10y ago
    Both of mine (1996 and 2007) were under an hour, and that was gated on me reading each of the docs and validating the figures on the HUD-1, which I demanded they present to me the afternoon before and I scheduled both closings to start at 4 PM. On both HUD-1s, I found "innocent mistakes" that would have been against my interests by a few hundred dollars. I started to believe that those weren't so innocent after all, but rather calculated to get people to just sign over an extra few hundred dollars to get things over with. Starting that argument at 10 AM by email was a way more effective use of my time than raising it (or caving) during the closing. "If you don't have this sorted, we'll have to reschedule the closing" is effective motivation for the real estate agents and mortgage broker, whose commissions are on the line.
  - thwarted 10y ago
    That was exactly my experience when buying my first home back in 2003. There's a lot of information out there about buying a home, but very little of it is actually useful for first time home buyers, IMO. The mortgage company literally waited until the last minute to approve everything (or the broker waited until the last minute to tell us). Meanwhile, we had no place to stay if it fell through because we'd already ended our lease on the place we were before, and didn't really have the luxury to tack another week or so on closing if there were issues.
brebla 10y ago
Yes. Completely irrational. I can secure $60k+ in a matter of hours to purchase a new Tesla or Merc. Drive it off the lot and suddenly worth less than the loan. Real Estate, however, can take 45 days to close a loan when the projected value of the asset is surely positive. Antiquated and balkanized title process and (I suspect) unhealthy regulatory requirements are a bog. From there, I think it is simply inefficiencies in the lenders' operations. Would love an insider's take.
- TomVDB 10y ago
  FWIW, the lender seems to take urgency into account as well. And it's important to have a loan agent who's will to go the extra mile. We made an offer on $2.2M house last year in July, and needed a $1.3M mortgage and $500k HELOC (so $400k down.) We had a fantastic agent at Wells Fargo who promised he could pull it off in 15 days, at which point we'd leave on a 3 week vacation out of country. We signed 13 days later. The guy would call us at 10pm asking for more documentation when more information was needed. However, we had to send a copy of our plane tickets to prove to approvers further down the pipeline that there was a justifiable need for urgency.
  - abraca 10y ago
    That was my experience too. My guy at Wells Fargo knocked it out of the park. SOFI's service was not great. Slow to respond , often not responding to my direct questions with the info I needed, slow to move through underwriting etc. Oh and terrible rates compared to the banks I talked to. Even their technology was worse, in terms of being able to upload docs and track my loan.
- Domenic_S 10y ago
  I'm on my 3rd house. The escrow length isn't just about the loan, it's also to give you time to complete inspections. Home inspectors -- especially in hot areas -- can be booked out for weeks. It also gives the sellers time to find a new place/get packed and moved. The lender gets their ducks in a row because they're going to package and sell the loan, and there are lots of compliance issues to jump thru to get it sold (properly) after what happened during the crash. Lenders are very careful now, verifying down payment sources, income, credit, etc. I also did cars for a while and I can tell you most (all?) in-house car financing is provisional, and they do the hard work AFTER you drive off the lot. They like it this way because once you've parked that shiny car in your driveway and shown your friends, you'll work hard to keep it should something come up with the financing. If it doesn't work out they can (at worst) tow the car back to the lot. Not quite that easy with a house ;)

by tinbad 10y ago

fsckin 10y ago

Just bought my first house a couple months ago. Despite picking a lender that seemed to have their ducks in a row, I wound up 'at the table' from 9AM to 6:45PM. Everybody involved was surprised it actually got done. Fundamentally broken is an understatement.

tcoppi 10y ago
We bought a house last year with a credit union, and everyone during closing was quite surprised that we actually closed within two hours of starting. Apparently it is not unheard of for mortgage lenders to be doing final approval up to the day of closing, and keeping people on hold/not answering phones while you and the seller are sitting there twiddling your thumbs.
- ryandrake 10y ago
  This is one of the reasons why a seller would accept an all-cash offer significantly lower than a competing offer where the buyer requires financing. No seller wants to wait around for a lender to figure out how to do the one thing they're being asked to do.
  - markvdb 10y ago
    Hah. Only days? In Belgium, it takes three to four months. Plus about 15% of the purchase price in taxes, sky high monopoly notary fees and more.
- sokoloff 10y ago
  Both of mine (1996 and 2007) were under an hour, and that was gated on me reading each of the docs and validating the figures on the HUD-1, which I demanded they present to me the afternoon before and I scheduled both closings to start at 4 PM. On both HUD-1s, I found "innocent mistakes" that would have been against my interests by a few hundred dollars. I started to believe that those weren't so innocent after all, but rather calculated to get people to just sign over an extra few hundred dollars to get things over with. Starting that argument at 10 AM by email was a way more effective use of my time than raising it (or caving) during the closing. "If you don't have this sorted, we'll have to reschedule the closing" is effective motivation for the real estate agents and mortgage broker, whose commissions are on the line.
- thwarted 10y ago
  That was exactly my experience when buying my first home back in 2003. There's a lot of information out there about buying a home, but very little of it is actually useful for first time home buyers, IMO. The mortgage company literally waited until the last minute to approve everything (or the broker waited until the last minute to tell us). Meanwhile, we had no place to stay if it fell through because we'd already ended our lease on the place we were before, and didn't really have the luxury to tack another week or so on closing if there were issues.

brebla 10y ago

Yes. Completely irrational. I can secure $60k+ in a matter of hours to purchase a new Tesla or Merc. Drive it off the lot and suddenly worth less than the loan. Real Estate, however, can take 45 days to close a loan when the projected value of the asset is surely positive. Antiquated and balkanized title process and (I suspect) unhealthy regulatory requirements are a bog. From there, I think it is simply inefficiencies in the lenders' operations. Would love an insider's take.

TomVDB 10y ago
FWIW, the lender seems to take urgency into account as well. And it's important to have a loan agent who's will to go the extra mile. We made an offer on $2.2M house last year in July, and needed a $1.3M mortgage and $500k HELOC (so $400k down.) We had a fantastic agent at Wells Fargo who promised he could pull it off in 15 days, at which point we'd leave on a 3 week vacation out of country. We signed 13 days later. The guy would call us at 10pm asking for more documentation when more information was needed. However, we had to send a copy of our plane tickets to prove to approvers further down the pipeline that there was a justifiable need for urgency.
- abraca 10y ago
  That was my experience too. My guy at Wells Fargo knocked it out of the park. SOFI's service was not great. Slow to respond , often not responding to my direct questions with the info I needed, slow to move through underwriting etc. Oh and terrible rates compared to the banks I talked to. Even their technology was worse, in terms of being able to upload docs and track my loan.
Domenic_S 10y ago
I'm on my 3rd house. The escrow length isn't just about the loan, it's also to give you time to complete inspections. Home inspectors -- especially in hot areas -- can be booked out for weeks. It also gives the sellers time to find a new place/get packed and moved. The lender gets their ducks in a row because they're going to package and sell the loan, and there are lots of compliance issues to jump thru to get it sold (properly) after what happened during the crash. Lenders are very careful now, verifying down payment sources, income, credit, etc. I also did cars for a while and I can tell you most (all?) in-house car financing is provisional, and they do the hard work AFTER you drive off the lot. They like it this way because once you've parked that shiny car in your driveway and shown your friends, you'll work hard to keep it should something come up with the financing. If it doesn't work out they can (at worst) tow the car back to the lot. Not quite that easy with a house ;)