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Comment by millstone | Hacker News Reader

Surprising they're working with Lending Tree, which is very nearly a scam site. When you sign up with LT, your information is sold immediately, your credit is pulled multiple times (making it harder to get a mortgage), and you get an endless torrent of spammy calls. See CreditKarma reviews of LT: https://www.creditkarma.com/reviews/auto-loan/single/id/Lend...

Edit: A question about the mathematics of mortgage brokers. From what I've read, mortgage leads are sold for ~$30 and have a conversion rate of ~1-3%. This means that the purchaser of the lead has to recover ~$1500 per closed loan to pay for buying the leads. Doesn't this mean that loans from a broker site like this will cost you a lot more than working with lenders directly? My mortgage (from a direct lender) was a much better deal than I ever found on Bankrate.

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> your credit is pulled multiple times (making it harder to get a mortgage)

That's a myth. All mortgage credit queries within a 14 day window count as a single query. Lenders have not biased the system to penalise you for shopping for a good deal - they want to make offers to people who show good financial sense by doing that.

Also, when I signed up for Lending Tree I did not provide permission for hard inquiries. Every interested lender had to contact me and get my permission for a credit pull.

14 day is a very short window. I was mortgage shopping for over 2 months recently.

In theory you should get a better deal working directly with lenders.

In practice? For me it was the opposite. I worked with a mortgage broker (a professional, not a website) and I got a much better deal.

For startup folks, this is even more common. My current mortgage holder originally denied me credit completely (they were scared of someone working at a startup). My broker knew exactly how to work around this issue, asked me to sign a few forms, made a few calls, and then the same bank came back with the best offer.

Your best bet is to get a few quotes directly, but then to work with a mortgage broker to see if they can beat your best offer -- quite often they can.

I'll bite: how did they work around the issue?

I don't know all of the details, but my broker knew the right person to call at the bank. They asked for some details on the company, which I provided, and then viola, it was approved with a great rate.

This is the kind of thing that's impossible to do getting quotes from a website, or talking to someone that works at your local branch. It's a matter of knowing how to package your application and then being able to speak with someone that actually has some ability to make the decision.

That always made me a little nervous. We have all these new safeguards in place around mortgages since the last crisis, and I wonder how things like this are ok to leave up to back-channel conversations.

Not knocking you or your situation specifically, but in general if someone is not a great risk, but that goes away if they get someone to make the right phone calls, is that a good thing in the big picture?

Not judging, just posing the question.

It sounds like the risk wasn't quantified correctly in the first place. Being a highly-skilled tech worker, working for a well-funded startup should have nearly no impact on the probability of you being able to pay your mortgage. Even if the thing collapses, you can have another job within a week. If the whole industry collapses in a dotcom bust style, established companies will be heavily impacted as well.

I had a similar situation when buying my house. Tech employee, fairly high percentage of compensation was stock options (we'd gone public ~18 months prior) and the standard route wasn't working (as there was no place to put the variable/incentive comp).

Mortgage broker got it done very easily (albeit with Countrywide, not exactly known for the strictest of standards :) ).

Never missed or late on a payment on that loan.

Different companies offer different products. Some lenders were doing 90% LTV up to 800k, some were doing it up to $1m. Some lenders might give 30 year fixed rate loans on certain high LTV loans, others might only do ARMs.

Every business makes a calculation about what kind of business it wants to do.

I did not use a mortgage broker when buying a house. My reasoning was that they compete on price enough that the interest rates aren't worth shopping around for. The PRODUCTS may be. If I was doing a bridge loan to buy a 2nd house, I might shop around. If I'm doing a straight-up financed purchase on 2 stable well-documented incomes, I'm probably going to get about the same product and rate no matter what bank I use.

Scam site? That's pretty strong language considering that the site actually does what it says on the tin (source: 3x user of the site) - comparison shops mortgages then connects you with the lenders.

What it does not say on the tin is that the companies will sell your address many times over, resulting in a torrent of spam. I have my own domain, so I can see exactly where those spam originated. Then I used the site a few years later, with a new email, and that one got a torrent of spam.

fyi, fico8 and fico4 (which is what mortgage vendors use) coalesce multiple mortgage or auto inquiries in a 45 or 14 day window, respectively, into a single inquiry for scoring purposes

https://www.incharge.org/military-money/story/the-truth-abou...

Not sure about the US, but in Australia the broker's cut comes from the bank side and is not something you'd recover otherwise. They do however get a long trail of commissions from the loan.

Used a broker recently to refinance and it saved me over 1% on the rate and she did all the legwork in picking up documents, scanning, etc. Friend refinanced themselves and they were forever printing documents, driving across to banks to ID in person, etc.

The other thing you should do before any mortgage inquiry is opt out of pre-approved credit offers. Why? Scummy collection agencies and junk debt buyers know that you cannot be approved for a mortgage with any open, unpaid collection accounts. So if you have a medical bill that you forgot to pay, you'll be forced to pay it in a hurry. And hell, even if you have other bills that may or may not be yours, or are out of SOL, or any other thing, you will have to pay them if you actually want that mortgage. Yes, this is a giant violation of the FDCPA, but you are not going to get anything fixed within 30 days under the FDCPA.

Opting out means you can't be shopped around by the credit reporting associations (equifax, experian, transunion) on their list of mortgage shoppers. You can opt out for 5 years here:

https://www.optoutprescreen.com/?rf=t

If you want a mortgage in, say, 6 months you should go get a single inquiry tagged as mortgage to see if anything comes out of the woodwork. http://quickenloans.com can do that for you.

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