Hi all... I am a first time home buyer ! I am really excited ! I am scared that I'm getting ripped off by the mortgage guy ! He offered me a 5% initially and today when we actually went to apply, he quoted a 5.35% but he suggested to wait for a good rate to lock in which I am okay with. The thing that really worries me is that he showed me an APR of 6.1% that really scared me ! Are they any questions that I needed to be asking ? Anything that I should be aware of before closing ? Approximately how many days should I expect the loan to arrive after I lock in ? Please advise !!
Would help to know what kind of a loan product it is. Fixed/Adjustable rate, no. years, points/fee etc. so that a good apples-to-apples comparison can be done. ETA: Whos is the mortgage guy? A mortgage broker, bank loan officer, your realtor, cousin Freddie?
ilikebtmoney
Senior Member - 1K
posted: Sep. 24, 2009 @ 10:07p
5+ today? either your credit is garbage, you have little to no downpayment, or your "guy" is ripping you off.
What's your FICO mid score? He should have told you this, also what is your downpayment, and what kind of loan is it? conventional 30yr?
My score is 670 and I'm doing an FHA loan. So it's a 3.5% down payment. This guys is from weichart realtors ! He mentioned a rate of 5.35% yesterday and he asked me to wait till today !!
most homebuyers dont see the loan docs till closing day, where there are often rude surprises and no time to renegotiate or correct errors
Smart buyers demand docs in sufficient time for their attorney to review before closing
ilikebtmoney
Senior Member - 1K
posted: Sep. 25, 2009 @ 7:33a
itsmeprinceus said: My score is 670 and I'm doing an FHA loan. So it's a 3.5% down payment. This guys is from weichart realtors ! He mentioned a rate of 5.35% yesterday and he asked me to wait till today !!
Having your realtors (or associates) handle your mortgage isn't a good idea. Their best interest is their commission, not your best rate.
I'm not as good with FHA rates as they're harder to find and the rates and information is much more limited, however I suggest calling www.providentfunding.com to ask if they do FHA. I've always been curious anyways so let me know. They are almost always the lowest price I see for 30yr fixed conventional.
I know Quicken Loans does FHA and their rate will probably be about 5% today for an FHA so you could check with them too.
Also, no matter who you use, ASK FOR A GFE BEFORE YOU GET ANYWHERE FURTHER, and compare the terms/costs.
I did ask for a GFE. He gave me one. But the APR is the one that actually scares me !! 6.1% i'm thinking something's not right. He mentioned that there is no prepay penalty which I'm thinking is good. He charged me for the application fees($453) and said he will give that back to me on the day of closing (in paper). I'm looking at a small property ($180,000) with 3.5% down and it's in NJ. I looked up the https://providentfunding.com/default.aspx and they have very less interest rate and APR. I'm I missing something ??
Xnarg
Senior Member - 5K
posted: Sep. 25, 2009 @ 9:02a
Are you paying points? What's the term (30 fixed, 5/1 ARM, etc.)?
ilikebtmoney
Senior Member - 1K
posted: Sep. 25, 2009 @ 9:11a
itsmeprinceus said: I did ask for a GFE. He gave me one. But the APR is the one that actually scares me !! 6.1% i'm thinking something's not right. He mentioned that there is no prepay penalty which I'm thinking is good. He charged me for the application fees($453) and said he will give that back to me on the day of closing (in paper). I'm looking at a small property ($180,000) with 3.5% down and it's in NJ. I looked up the https://providentfunding.com/default.aspx and they have very less interest rate and APR. I'm I missing something ??
6.1% is high, go to another lender. It's worth losing the ridiculous app fee, or, you could contest the charge with your bank (if you paid it on a credit card), they may rule in your favor as the fee was paid and it was "misrepresented" the terms and conditions otherwise.
Do you think my bank will be okay with that ? This guy has my documentation as well ... can I trust him with my documents? I definately think it's a rip off ! Suggestions ??
You really should have started on this before making any purchase offers. If your realtor assured you he'd be able to take care of it for you later, that's pretty evil and you should treat him with the distrust and disdain that otherwise is reserved for car salesmen and child molesters.
The higher APR likely means you're paying a lot of one-time fees at the close of the loan. But APR calculations are not terribly consistent, so it's not a great number to use when shopping around. The numbers you need to know are: the interest rate and the (non-prepaid) closing costs for each loan. In general, the lower the rate, the higher the costs, so you need to decide which you favor (I would recommend lower closing costs). But you need to get GFE quotes from several sources to have any confidence that you're getting a reasonable deal.
Prepaid closing costs are for things like property taxes and insurance. It can be a significant sum, but this is money you're going to have to pay within the next year or less anyway, so I don't think they are worth factoring into your loan comparisons. You will need cash on hand to cover them, but that's the only consideration I give them.
itsme, points are a tradeoff: pay now or pay later. Buying points is a bet that you won't find a better rate for refinancing and will keep the loan for some period of time - usually years and the more you pay, the longer the term. If you don't keep the loan that long, the lower rate savings won't offset the points expense.
In many ways, whether you pay "points" or not is irrelevant. All that matters is the total of all upfront fees. Lenders and brokers rearrange and rename them in infinite combinations, the total is all that really matters. Points can be tax-deductible and most other fees are not, so for any fees you are paying, points can be preferable to fees under any other label.
I spoke to another guy just now and he mentioned that will give 5.0% interest rate and 5.6% APR. He said he will charge $495/- and he will refund at closing. I'm scared i will loose my money with this guy !
itsmeprinceus said: I spoke to another guy just now and he mentioned that will give 5.0% interest rate and 5.6% APR. He said he will charge $495/- and he will refund at closing. I'm scared i will loose my money with this guy ! You need to identify who and what type of lender or broker you are talking with. Guy is not good enough and you are going to get run over.
Well I don't know how to proceed, everyone is giving me attractive numbers till I actually pay the application fees. And once I pay the fees, they are giving me all kinds of numbers ! How can I proceed without these ? What should be my approach before contacting the mortgage guy ?
FYI: I am not going with the mortgage person my Realtor advised me to coz its simple, I DON'T TRUST HER !
tester99
Member
posted: Sep. 25, 2009 @ 1:24p
That's your right, Pick a few , get some recs , tell them all your shopping rates and see who works the hardest to get your buisness. Once you make a decision stick with it untill right before close and see if anyone can beat your final deal.
itsmeprinceus said: till I actually pay the application fees. And once I pay the fees, they are giving me all kinds of numbersPay no application fee till closing; they can take it or you find someone else who will
I asked them to do that but they mentioned that they were like who will pay the appraisal feel if you don't get the loan from us ! I didn't have an answer for that. I am in NJ. Do you know if there are any mortgage people that can do that?
OT but... It's good for noobies like me to read these threads to avoid the pitfalls of others. Nice to read all the advice people give to help someone out...was unfamiliar with some of the jargon, and imagine my surprise when I looked up GFE. I guess tough times indeed makes realtors go the extra mile for their clients. LINK
ilikebtmoney said: itsmeprinceus said: My score is 670 and I'm doing an FHA loan. So it's a 3.5% down payment. This guys is from weichart realtors ! He mentioned a rate of 5.35% yesterday and he asked me to wait till today !!
Having your realtors (or associates) handle your mortgage isn't a good idea. Their best interest is their commission, not your best rate.
I'm not as good with FHA rates as they're harder to find and the rates and information is much more limited, however I suggest calling www.providentfunding.com to ask if they do FHA. I've always been curious anyways so let me know. They are almost always the lowest price I see for 30yr fixed conventional.
I know Quicken Loans does FHA and their rate will probably be about 5% today for an FHA so you could check with them too.
Also, no matter who you use, ASK FOR A GFE BEFORE YOU GET ANYWHERE FURTHER, and compare the terms/costs.
We need more details. The FHA loan with that high of an APR might be about right. The thing with FHA is that they don't go by fico score so much because of the insurance they have on the loan, but because of the insurance, the loan does cost a bit more money. Sounds like he's marking up the loan a little bit, a regular 30 year is under 5% now but because your fico isn't over 720/740, you wouldn't qualify for that type of rate. Also that rate usually implies a 20% downpayment and you don't have that either. The small loan amount also means they don't make as much money so there's probably a 1/8 or 1/4 extra profit built in that you may get somewhere else. I don't know of too many or even any places that will let you get away without an application fee because that typically pays for the appraisal and if the loan doesn't go through, the bank gets stuck with the bill. Some banks can keep their fees low by refunding it at closing, but if there's no closing, they're stuck with the bill. Best rates are typically with a bank or credit union although some large mortgage brokers can still give you pretty good rates, especially if they're correspondent lenders that still have a warehouse credit line. Mortgage brokers also tend to get the loan done quicker and there're usually more on top of things than a bank. But you do tend to pay more for that extra service, but sometimes it's worth it depending on the situation.
Skyvue
Senior Member
posted: Sep. 27, 2009 @ 8:37a
If you only have 3.5% to put down you really shouldn't be buying this property at all.
It is no actually the amount of money I have, it's just that I wanted to take adv of the FHA. I want to hold onto cash rather than putting into my down payment cz that's not going to make much of a difference. My payments are less than my rent when I calculated, so I should be okay. I hope !
Skyvue
Senior Member
posted: Sep. 28, 2009 @ 7:19p
Just keep in mind, that if you were to lose your job and your renting, then you can move somewhere less expensive or move in with family or friends if you need to. If you buy a home and lose your job, your stuck with a mortgage payment that is not easy to get out of right now. I would make sure you have a very big cash cushion (12 months expenses) after your down payment and closing costs before doing this. As one famous talk show host says, you don't want this blessing (a house) to become a curse.
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
Members of our community may attach files to a post in accordance with the User Agreement. FatWallet is not responsible for the content, accuracy, completeness or validity of any information contained in any attached file. Files have *not* been scanned for viruses. Be especially wary of Excel files which may contain malicious content.
