Stay Away from Guaranteed Rate in Boston

Back in May of 2021 my wife and I began searching for a single family home as we had outgrown our condo. 

Naturally we wanted to get pre-approved with a lender or a mortgage company, so we decided on Guaranteed Rate and a couple other lenders.

June 1, 2021 we provided all docs and had our credit pulled. My mid score was 743 and wife's was 713. All was in order, the house search intensified for a few weeks thus culminating in an accepted offer, we were absolutely ecstatic given the competitive market. But that excitement was short lived until we requested a Loan Estimate (also know as a Good Faith Estimate) from Guaranteed Rate.

As it turns out, the rate Guaranteed Rate offered was 3.125% for 20 years, which was rather high given we are well qualified buyers with combined income, very little debt and healthy credit scores.

The Loan Estimate, to this day, has not been provided to us despite having asked for it multiple times. I provided all the necessary docs, including the accepted offer, yet the process to obtain the full Loan Estimate felt like I was begging the Boston based (WeWork)  Guaranteed Rate team to disclose more details about the closing costs etc for the loan we had been approved for.

Immediately I reached out to one other mortgage company (New Fed Mortgage) and a local bank (East Boston Savings Bank - now Rockland Trust), within a couple hours I had two solid Loan Estimates; 

New Fed Mortgage (Boston)

2.5% 20 years $5,420 in bank and attorney fees ($1,725 in points already included).

East Boston Saving Bank

2.75% 20 years $4,600 in bank and atty fees.

When I informed Guaranteed Rate about it they offered to match the rates as long as I could provide a rate sheet from the competitor. Of course, I did not fall for their shenanigans nor was I going to reward their initial attempt to swindle me out of .625 (or 1/8) of a point.

It is the modern form of  predatory lending, so consumers beware. 

Always get a second opinion, once you have an accepted offer.

Don't let predatory loan officers brainwash you about your credit (or credit of your significant other ) being on a different tier to justify their abusive predatory practices. 

Particularly with folks a Guaranteed Rate in Boston.

ADVICE FOR GETTING PREP-APPROVED

- Have your credit pulled by 2-3 lenders, ideally on the same day.

- Use this letter to present offers.

- Make sure offer amount always matches amount on the pre-app letter: dont present an offer for $400k with a pre-app letter for $450k, as an example. 

- Once your offer is accepted, submit the listing sheet along with the offer to purchase page to all lenders (at least 3) asking for a Loan Estimate. Do not let them pull your credit again.

- Be sure to know your mid score (Equifax) before hand so you understand how much of a hit you are taking. Dont want to price yourself out to a good rate by excessive pulls. Generally if your mid score is 754 or higher you will be at around 743 after 3 pulls. 

- Be sure to only focus on (compare) the bank fees and attorney fees between lenders. These will vary from lender to lender. Ask whether points are already included in the closing fee.

- Ask the Loan Officers to leave out the pre-paid items and reserves (property taxes, home owner's insurance, escrow, etc..). These items are fixed and are exactly the same (or very close, with some exceptions) across all lenders. Otherwise, leave them out in your comparison. Again only focus on bank and attorney fees.

- Also, be sure to compare the obvious;  Rate, APR, Principal and Interest (PI) payment, etc...

- Try NOT to roll closing costs into the life of the loan, unless absolutely necessary.

- If you have a personal attorney who can also be the closing attorney for the lender, then use your attorney. Otherwise ask the lender atty to review the P&S for you if it is a simple, straightforward deal (standard P&S). Usually attorneys charge from $250 to $500 to go back and forth with the other atty (seller's) and attach riders etc.