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akularanger said:   Yes. It is better to use the filter option to select "No fees, no points". 1st party fees (loan origination fee, points, application fee, credit check, appraisals...etc) differ quite a bit from lender to lender. 3rd party fees like title/escrow and recording are pretty much the same regardless of lender.Whether or not title and escrow fees will be similar lender to lender depends on the situation and the state. In addition, there could be other fees that the use of the filter won't pick up. For instance, some lenders pass through Fannie's and Freddie's 25bps charge to waive escrows, while others already reflect it in their pricing, such that it doesn't cost you anything extra to do so. Some lenders have the ability to slightly improve pricing for especially strong files, while others don't. Finally, some lenders will offer additional pricing concessions on top of their Zillow pricing while others won't.

Hence, the reason that people shouldn't just call the broker/lender that shows up as having the "lowest APR" and the "lowest fees."

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30-yr jumbo

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The total with lender fees,points,appraisal, title and recording cost is coming to 2400$ for 3.375. I could have also chosen 3.5% for a no cost loan but I think shelling out 2400$ for inflation adjusted(assuming 3% inflation) after tax savings of 4580$ seemed worth it to me.

What I have done in past is to lock the rate which I am happy to go with and then try to postpone the appraisal for a week or so. In the meantime if interest rates or fees change for the better(>600$ or so) I would just call and cancel the loan and lock with someone else. Since appraiser hasn't come out yet you will get full refund back.

One catch to this strategy is lets say your first broker locked you for a provident funding loan and then the rates improve..........you won't be able to lock the better rates with another broker who is also writing provident loans. So you will have to compare the existing lock with the next best lock available excluding provident. In many cases you don't know who is funding your loan really.Sometimes brokers tell you. One thing I have noticed is that whenever appraisal costs $495 the loan is most likely Provident`s. YMMV

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Jumped to another lender where total with lender fees,points,appraisal, title and recording cost is coming to 1500$ for 3.375. Close to a 1000$ improvement in two days.

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gaurav1980 said:   Jumped to another lender where total with lender fees,points,appraisal, title and recording cost is coming to 1500$ for 3.375. Close to a 1000$ improvement in two days.
† What's the loan amount? The lender's credit is always a function of the loan amount.

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Loan amount(~400k) was the same between my previous lock and the new lock.

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gaurav1980 said:   Loan amount(~400k) was the same between my previous lock and the new lock.
You may want to check to see how much the credit would be at 3.5%. If it would just cover your remaining closing costs, it'd take 4.5 years for you to come out ahead with the 3.375%. If the 3.5% loan would result in an additional lender's credit to you, you may be better off with the 3.5%, as the breakeven period associated with a 3.375% could be very long.

During my last refi I intentionally went with the 3.5% no closing cost 30 year fixed versus a 3.375%, as the lender's credit attached to the 3.5% meant that it would've taken 10+ years for the 3.375% to become advantageous (the credit covered all closing costs and the remaining portion was applied against property taxes and insurance).

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I intend to not sell this property even if we move because the rents will easily cover the monthly payment. The 3.5% comes with $1500 credit from the lender. As per my calculation over the life of the loan I would save $9720. But if I calculate present value using after tax(25%fed + 9%state) and after inflation(3%) numbers the savings reduce to $4580. So still $4500 is better than $1500 and hence I would go with 3.375%.

I accept that in case I have to refinance again I loose that upfront money.

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gaurav1980 said:   I intend to not sell this property even if we move because the rents will easily cover the monthly payment. The 3.5% comes with $1500 credit from the lender. As per my calculation over the life of the loan I would save $9720. But if I calculate present value using after tax(25%fed + 9%state) and after inflation(3%) numbers the savings reduce to $4580. So still $4500 is better than $1500 and hence I would go with 3.375%.

I accept that in case I have to refinance again I loose that upfront money.

At $400K, the difference between 3.375% and 3.5% is $27.80/month. Yet, the 3.5% 30 year fixed comes with an additional $3,000 credit. If you take that $3,000 and divide it by $27.80/mo, you get the breakeven period of approximately 108 months, which is 9 years. This is how long it'll take for the 3.375% to become more advantageous than the 3.5%.

With these types of numbers, the 3.5% should be very close to a no brainer.†Over the years, there have been multiple people in this and other threads who have argued that the chance of them not keeping their loan for 15+ years is zero, as they'll never sell, never refinance again because the rates are so low, etc... Yet, the vast majority of them have been wrong. On average, people do not keep their mortgages for that long (which is different than the length of time that they stay in their houses, as there is a myriad of reasons that mortgages get paid off), which is the reason that accepting such long breakeven periods hardly ever makes sense.

This is not to say that it doesn't happen (I actually have a mortgage on one of our properties that I've had for 12 years, and it's an ARM, which are typically kept even less than fixed rate mortgages, but it is one of those unique situations where it has never made financial sense to get rid of it, although that point is probably coming in the next few years; all the other mortgages on our other properties have been refinanced countless times), but the odds are very much against it. Hence, I would really think long and hard about accepting a 9 year breakeven period.

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I think you are right.

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gaurav1980 said:   Jumped to another lender where total with lender fees,points,appraisal, title and recording cost is coming to 1500$ for 3.375. Close to a 1000$ improvement in two days.
†† who's the new lender?

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gaurav1980, Thanks for the reference.
How has your communication with them been so far? Is your case a refi or a purchase....

I'm looking at a purchase, so looking for someone who can close on time....
Any others who have experience with these folks?

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Communication has been good so far. Have a direct phone number of the loan officer who picks up and answers all questions every time. They locked the rate for 42 days which might suggest that they may not be able to close in 30 days.

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Thanks for the quick reply. How much do they charge to lock?
did you ask for 42 days or that is the lowest they could do?

Zillow reviews seem to convey initial communication is good until they hand it off to underwriter. just something to keep in mind....

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No charge to lock. There is a $500 upfront fee that you pay when you submit all documents and not when you initially lock the loan. The $500 fee offsets the closing costs when you close the loan.

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MBS -14/32s

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gaurav1980 said:   I intend to not sell this property even if we move because the rents will easily cover the monthly payment. The 3.5% comes with $1500 credit from the lender. As per my calculation over the life of the loan I would save $9720. But if I calculate present value using after tax(25%fed + 9%state) and after inflation(3%) numbers the savings reduce to $4580. So still $4500 is better than $1500 and hence I would go with 3.375%.

I accept that in case I have to refinance again I loose that upfront money.

† †how abt this Gaurav from AimLoan? I'm sure the closings might be on a higher side.† †30 Year Fixed Rate

  • 3.25% with 1.58 guaranteed discount points and $0.00 rebate
  • 3.375% with 0.675 guaranteed discount points and $0.00 rebate
  • 3.5% with 0.0 guaranteed discount points and $1000.00 rebate

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Assuming everything else being the same Aimloan is 5,658$ more than smarter mortgage so no deal

Aimloan @3.375% 30 year FRM
Guaranteed Lender Fee $1,995.00
Guaranteed Discount Points $3,663.00
Rebate = $0

Smarter Mortgage@3.375% 30 year FRM
Guaranteed Lender Fee $0
Guaranteed Discount Points $0
Rebate = $0

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I find Smarter Mortgages has odd number of locking days. industry standard is 30/45/60, but they do 27/42...
But I think the underwriting is the bottleneck for most internet lenders. under-staffing is probably one of the reasons they can keep rates and cost low.

For purchase loan I would rather go with a local brick and mortar bank or a TBTF bank. You pay 0.125~0.25% more in interest for peace of mind that the loan will close on time. If you have a GFE from an internet lender, there is a good chance you can ask your local bank to match it.

lastly, as a borrower you can always select your own title/escrow company. Obviously you choose the one charges the least and with a good service. County recording fee is standard and also notary fee for final doc signing so that's why I say 3rd party fees are pretty much identical.

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The above math is based on 396k loan amount and current Aimloan quote

Rate APR Points Closing Cost Monthly Payment
3.250% 3.449% 1.830% $10,717.85 $1,723.42
3.375% 3.501% 0.925% $7,134.05 $1,750.70
3.500% 3.551% 0.000% $3,471.05 $1,778.22

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MBS -14/32s
any idea what caused this....?
did we hit a short term minimum this morning... and then rates started rising again....

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dup

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I just received an email from Capital One advertising 15 year, 3.00% / 3.109%. I never thought 15 year would go below 3.25 again. No experience with them and I don't know the full terms. Might help someone out.

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whatSay said:   MBS -14/32s
any idea what caused this....?
did we hit a short term minimum this morning... and then rates started rising again....

†† profit taking? MBS price has had gone up every day for 2 weeks so it is quite natural for the price to drop.

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MBS -14 (again)

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AMCBL said:   MBS -14 (again)
† looks like gaurav got lucky and locked at the right time. let's see if Smarter Mortgages will be able to close on time

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Its a refinance. So as long as they extend the rate when it expires I am ok with the delay.

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MBS +5/32s

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anyone have experience w/ American Interbanc Mortgage?

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Locked in at 15 year FRM†@3.000%
No cost/ origination or discount points (except usual fees for refinance (underwriter $900, atty $500, appraisal $500)†

Currently,†15 year FRM†@3.500% on 400k mortgage.

Purchased property only 6 months ago and anticipate at least 5-8 years if not lifetime. Break-even is approx. 1 year.

Is this a good decision?

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norebates said:   Locked in at 15 year FRM†@3.000%
No cost/ origination or discount points (except usual fees for refinance (underwriter $900, atty $500, appraisal $500)†

Currently,†15 year FRM†@3.500% on 400k mortgage.

Purchased property only 6 months ago and anticipate at least 5-8 years if not lifetime. Break-even is approx. 1 year.

Is this a good decision?

††
Decision to refinance is OK but the rate and fees is not. Try calling Sebonic Financial or Smarter Mortgage and you will get much better deal. Right now Sebonic can lock you at 2.875% with no lender fees or appraisal fees. You will just have to pay title and recording.


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