There is a current interest rate secret that lenders don't want you to know about...

Over the past 6 months, the largest group(s) making an impact to market share for mortgage lending are Credit Unions and Local Banks/Mutuals.

We can get into the logistics a bit, but the bottom line is that in almost every State or local market there is a credit union/small bank/mutual that is offering a rate significantly below the rates you are finding when working with the "big name" local lenders or your Agent's preferred lender. They are able to do this because they are putting the loan on their portfolio and either

1 - understand that they are lending at a very low rate but their typical volume is not large enough to need to make a change or 2 - the individuals who set rates are asleep at the wheel (because their mortgage loan volume is not impactful to their bottom line)

We lend nationwide and started to run into Credit Unions and Small Savings banks offering rates/terms that you would consider ridiculous around June of this year. It then escalated to over 30% of our overall rate losses (from 5%).

Right now we are seeing 4% on 5/1 ARMs, 4.25% on 7/1 ARMs, 4.875% on 30 year fixed rates. The lenders are completely different in every local market from Chocolate Bayou Savings in Houston to the California Teachers Credit Union in CA.

The bottom line is - if you are looking for a mortgage rate right now, you need to look for every local bank and credit union and see what they have to offer before making a commitment. If you are about to take a 30 fixed in the 6+% range, you should know that you are missing an opportunity to save hundreds of dollars every month in interest.

Some larger lenders with high performing Originators are trying to work with these small banks and credit unions to allow their Originators to offer these products in hopes that the small bank or credit union will buy those loans immediately. However, these banks/credit unions do not want "that much" volume at these low interest rates.

This has not been the case historically. Larger Lenders were able to offer competitive rates and uncompetitive rates might only be .125 or .25% higher than other lenders. However, we are now seeing portfolio rates at 1-2% lower than large/national lenders.

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source https://www.reddit.com/r/RealEstate/comments/z80whn/there_is_a_current_interest_rate_secret_that/