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 !!
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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?
Message edited by: uutxs on 2009-09-24 20:22:42 CDT
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 !!
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 ??
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 !
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.
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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 !!
