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Mortgage loan question?
- Thread starter V00DOO
- Start date
tranceport
Diamond Member
If you were in the miltary apply for VA loan...
Saulbadguy
Diamond Member
watch out for points. compare FHA to conventional loans. try your local banks. how much down payment do you have?
richardycc
Diamond Member
check your local banks, some might have first time home buyer program, etc.
Vic
Elite Member
Generic advice like what you are asking for is useless. Buying a house and getting a mortgage ain't like going to the store for a loaf of bread and a gallon of milk, although some people would like to have you believe that.
How much of a house do you want to buy?
What kind of monthly payment would feel comfortable with?
How much do you have to put down?
How is your income and job stability?
How is your credit?
Are you prepared to pay to get into a house? Earnest money, appraisal, and inspection are NOT lender costs and are all upfront (although earnest will be refunded at closing).
One piece of advice I can give you is to find a local realtor in your area, preferably one referred to you by a friend or relative, who can help you find a good house and a lender.
How much of a house do you want to buy?
What kind of monthly payment would feel comfortable with?
How much do you have to put down?
How is your income and job stability?
How is your credit?
Are you prepared to pay to get into a house? Earnest money, appraisal, and inspection are NOT lender costs and are all upfront (although earnest will be refunded at closing).
One piece of advice I can give you is to find a local realtor in your area, preferably one referred to you by a friend or relative, who can help you find a good house and a lender.
compare bank fees
banks are sneaky and call them different things so its hard to compare apples to apples ......application fees, origination fees, appraisal fees etc, etc....
oh....and I just got a mortgage through CitiBank...I would NOT recommend them....had to stay on top of them the whole time, unbelievable amount of errors - I am amazed they stay in business 😕
banks are sneaky and call them different things so its hard to compare apples to apples ......application fees, origination fees, appraisal fees etc, etc....
oh....and I just got a mortgage through CitiBank...I would NOT recommend them....had to stay on top of them the whole time, unbelievable amount of errors - I am amazed they stay in business 😕
Vic
Elite Member
edit: that's what the APR on the Truth-in-Lending disclosure is for.
For example:
- a 30 year fixed $100k loan @ 5.75% with no fees would have an APR of 5.75%
- a 30 year fixed $100k loan @ 5.5% with $2k in fees would have an APR of 5.684%
Oooh... how dare those dirty banks try to sneak those fees in...
You shop title companies as well. Get a break down of their fees.
Another thing is backout fees or early termination fees. For instance, most DiTech (read: don't use) loans have a 5 year termination fee. If for any reason you make a change to your mortgage in the first 5 years, you are paying a steep penalty.
Another thing is backout fees or early termination fees. For instance, most DiTech (read: don't use) loans have a 5 year termination fee. If for any reason you make a change to your mortgage in the first 5 years, you are paying a steep penalty.
Oakenfold
Diamond Member
Originally posted by: Vic
edit: that's what the APR on the Truth-in-Lending disclosure is for.
For example:
- a 30 year fixed $100k loan @ 5.75% with no fees would have an APR of 5.75%
- a 30 year fixed $100k loan @ 5.5% with $2k in fees would have an APR of 5.684%
Oooh... how dare those dirty banks try to sneak those fees in...
Vic knows what he's talking about people, listen well.
😉
DT4K
Diamond Member
Only advice I have is:
If your credit is "less than perfect", look into FHA loans. They have limitations(like max loan amounts), but are worth checking out.
When my wife and I bought our house in Nov 2002, my FICO score was around 575. I was approved for an FHA loan because they could tell by looking at my credit that we had made a lot of effort to improve it.
We got a loan at 6.5% with a 3% credit back(negative points) to cover closing costs.
If your credit is "less than perfect", look into FHA loans. They have limitations(like max loan amounts), but are worth checking out.
When my wife and I bought our house in Nov 2002, my FICO score was around 575. I was approved for an FHA loan because they could tell by looking at my credit that we had made a lot of effort to improve it.
We got a loan at 6.5% with a 3% credit back(negative points) to cover closing costs.
First thing you do BEFORE anything else (researching, talking to lenders, looking at houses) is check your CREDIT RATING. You can order all three from http://www.myfico.com for about $30. This will tell you how good of an interest rate you are going to qualify for. If you have a FICO or BEACON score over 650, you generally qualify for the best rate (assuming you aren't laden with other debt). Pour over your reports and correct ANY wrong information, even if it's just address location or work history. This make take you 60 days or so to get everything sorted out, but it's worth it when you save $1000's on a home loan because you got the best interest rate. Then, go to:
http://www.bankrate.com
Then check with your credit union/bank if they offer mortgages. Narrow down to 2-3 lenders, and ask for a good faith estimate of closing costs from each one. You have to first look at yearly interest rate, then closing costs, and then read the contract for stuff like prepayment penalties (you don't want one, this lets you pay the house off early which saves on interest). Try to get a 15 year loan instead of 30. You start paying principal much faster on this type of loan, which is great when you want to sell and move which most people do on an average of 7 years. If you cannot afford the property on a 15 year note, don't buy it. It's out of your price range. I say this assuming this is your first home and not the dream house you have been saving up for over 10 years.
Make sure you get the rate locked in when you agree to the loan, that the lock lasts at least 30 days, and you get it in WRITING. I had an unscrupulous lender try to change the interest rate at the closing table on my first home even though they "guaranteed" the rate for 30 days. Since it wasn't in writing, I had to take the higher rate or walk away from the closing table. Fortunately, we were able to negotiate out some fees in exchange for the higher rate so I didn't have to cancel the loan at the last minute.
Take your time and do your due diligence. It's worth it in the end.
[/end soapbox]
http://www.bankrate.com
Then check with your credit union/bank if they offer mortgages. Narrow down to 2-3 lenders, and ask for a good faith estimate of closing costs from each one. You have to first look at yearly interest rate, then closing costs, and then read the contract for stuff like prepayment penalties (you don't want one, this lets you pay the house off early which saves on interest). Try to get a 15 year loan instead of 30. You start paying principal much faster on this type of loan, which is great when you want to sell and move which most people do on an average of 7 years. If you cannot afford the property on a 15 year note, don't buy it. It's out of your price range. I say this assuming this is your first home and not the dream house you have been saving up for over 10 years.
Make sure you get the rate locked in when you agree to the loan, that the lock lasts at least 30 days, and you get it in WRITING. I had an unscrupulous lender try to change the interest rate at the closing table on my first home even though they "guaranteed" the rate for 30 days. Since it wasn't in writing, I had to take the higher rate or walk away from the closing table. Fortunately, we were able to negotiate out some fees in exchange for the higher rate so I didn't have to cancel the loan at the last minute.
Take your time and do your due diligence. It's worth it in the end.
[/end soapbox]
JulesMaximus
No Lifer
Just go talk to a real estate agent/realtor. They will help you figure out how much you can borrow and at least refer you to a mortgage broker. If you don't like the person they refer you to you can always talk to a bank or call whomever you like to facilitate the loan.
Vic
Elite Member
Just to add to wyvrn's post, lenders are required by law (RESPA 1974) to provide some of the things he mentioned.
For example, lenders are required to provide the Good Faith Estimate, a copy of the Uniform Residential Loan Application, the Federal Truth-in-Lending Disclosure, and the Rate Lock Agreement within 3 days after the borrower applies for the mortgage loan. Because federal and state oversight compliance has become more and more strict about the accuracy of these forms, many lenders will refuse to provide one immediately, but will happily provide one within the 3 day timeframe (meaning that it must be postmarked within 3 days, so give it a little extra time if mailed). They just want to make sure that the forms are accurate. If your lender does not provide you with these disclosures within the appropriate timeframe, cancel your loan application with them.
When you do receive your disclosures, check them both for content AND accuracy. For example, the good faith estimate will include some items that really aren't fees, like "prepaids" like interim interest and upfront impounds for your property taxes and homeowners insurance. Those amounts vary based on when your loan closes, but will be EXACTLY the same from lender to lender. Some lenders like to make the bottom line fees on their estimates look lower by not including them on their estimates, and then sneaking them back in at closing. Don't fall for that.
One more thing about fees. Pardon me if my earlier post seemed a little nasty, but all loans have fees. Sometimes, banks and lenders will offer "no fee" loans that (instead of fees) have slightly higher-than-market rates. In fact, this was very popular during the refi boom last spring and summer. What most borrowers seem unable to realize is that a slightly higher rate will cost a lot more over the long run than paying appropriate fees on a market rate loan would have. And that higher rate is as good as money to the bank/lender when the loan is sold on secondary market.
Look at that APR on the Truth-in-Lending Disclosure.
It doesn't lie. The loan with the lower APR is the loan with the lower cost over the long run, regardless of fees.
For example, lenders are required to provide the Good Faith Estimate, a copy of the Uniform Residential Loan Application, the Federal Truth-in-Lending Disclosure, and the Rate Lock Agreement within 3 days after the borrower applies for the mortgage loan. Because federal and state oversight compliance has become more and more strict about the accuracy of these forms, many lenders will refuse to provide one immediately, but will happily provide one within the 3 day timeframe (meaning that it must be postmarked within 3 days, so give it a little extra time if mailed). They just want to make sure that the forms are accurate. If your lender does not provide you with these disclosures within the appropriate timeframe, cancel your loan application with them.
When you do receive your disclosures, check them both for content AND accuracy. For example, the good faith estimate will include some items that really aren't fees, like "prepaids" like interim interest and upfront impounds for your property taxes and homeowners insurance. Those amounts vary based on when your loan closes, but will be EXACTLY the same from lender to lender. Some lenders like to make the bottom line fees on their estimates look lower by not including them on their estimates, and then sneaking them back in at closing. Don't fall for that.
One more thing about fees. Pardon me if my earlier post seemed a little nasty, but all loans have fees. Sometimes, banks and lenders will offer "no fee" loans that (instead of fees) have slightly higher-than-market rates. In fact, this was very popular during the refi boom last spring and summer. What most borrowers seem unable to realize is that a slightly higher rate will cost a lot more over the long run than paying appropriate fees on a market rate loan would have. And that higher rate is as good as money to the bank/lender when the loan is sold on secondary market.
Look at that APR on the Truth-in-Lending Disclosure.
It doesn't lie. The loan with the lower APR is the loan with the lower cost over the long run, regardless of fees.
DT4K
Diamond Member
But it depends on how long you are going to be in the home. If it's only a few years, you may very well be better off paying higher interest and having lower fees.
For me, paying $50 more per month on a higher rate to save $4000 in closing costs was a very good idea. I'm ahead this way until 8 years or so. And I doubt I will still be in this house for 8 years. Plus, I didn't have the 4K, so doing it this way made it possible for me to buy my house. And if I had waited until I had more money saved up, I would still be saving right now instead of owning my home and having about 30k in equity after 1 year.
For me, paying $50 more per month on a higher rate to save $4000 in closing costs was a very good idea. I'm ahead this way until 8 years or so. And I doubt I will still be in this house for 8 years. Plus, I didn't have the 4K, so doing it this way made it possible for me to buy my house. And if I had waited until I had more money saved up, I would still be saving right now instead of owning my home and having about 30k in equity after 1 year.
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