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Old 03-17-2012, 11:58 PM
pll pll started this thread
 
928 posts, read 1,373,714 times
Reputation: 783

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We will be purchasing a home this summer and we were wondering if it would be better for us to get our loan through our credit union or a bank? We have met with a mortgage broker and she said that she could get us a Conventional loan. We will have to raise our fico score by 40 points in 3 months..She informed us that this would be possible because we have good credit. I'm not sure if this is true.
Also, she informed us that she could do better then our credit union because they don't usually shop for the best loan for their customer. Our previous home was a FHA loan with our credit union.
We are not sure who to believe. We recently moved to CA which doesn't have the best track record for looking out for the best interest of the buyer so we are a little nervous.
Any advice would be appreciated.
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Old 03-19-2012, 02:22 PM
 
Location: Austin, TX
20 posts, read 56,515 times
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My First question is what are those FICO scores. Qualifying conventional in my opinion is the way to go especially after April 2012 because once again HUD is raising the costs of upfront mortgage insurance and the monthly mortgage insurance premium for all FHA loans.

If your credit is 680 or higher then I say go conventional and put down at least 5% and there are several options to keep the necessary PMI as low as possible so you are not adding a huge monthly cost to your payment.

If you have to raise your FICO by 40 points in three months, it is possible but hard. If you have large credit card balances you could take those balances down and that would help and would be the fastest way to accomplish a big jump like that. However without knowing your scores I can't accurately give you advice, for example if your scores are 640 and the broker needs them to be at 680, then I wouldnt believe you to have good credit. Now if you are at 680 and need to get to a 720, that just may mean she is trying to get you a better rate not necessarily to qualify.

To answer the other part of your question, I firmly believe that if you can find a trustworthy knowledgeable Mortgage Broker you will get a better deal any day of the week than a credit union or bank. Think of these entities as retail channels, like shopping at Walmart, a mortgage broker works wholesale like shopping factory direct. So the broker you are talking to is right about getting you a better deal.

Honestly now it doesn't matter which state you are in, Mortgage Brokers are all now governed by the SAFE act and have to nationally licensed as well as state licensed. They have been reguatled now heavy since 2010 by the goverment. Most brokers that are left after 2010 are the cream of the crop. Now that is not to say that there are still bad apples but you can be rest assured that more than likely you are dealing with a reputable person that has been through a lot to call themselves a licensed Residential Loan Originator.

To feel more comfortable ask for her NMLS # and go to the following website:

Consumer Access

you can search her and her company to make sure they are fully licensed in CA and you can see her previous experience and if there is any negative history.

If she doesnt have an NMLS number either she is operating illegally or she is not really a broker and has to operate under a mortgage banking service, if the latter is the case then beware on getting a better deal than your credit union or bank.
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Old 03-19-2012, 05:39 PM
pll pll started this thread
 
928 posts, read 1,373,714 times
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Quote:
Originally Posted by eweishaar View Post
My First question is what are those FICO scores.

Thank you for your informative answer! I'm glad to know we are on the right track. We will be sure to check out our broker's credentials.

As far as our FICO score, right now it is at 720 and she is trying to raise our score to 760. I hope we can raise it.
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Old 03-19-2012, 08:36 PM
pll pll started this thread
 
928 posts, read 1,373,714 times
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Quote:
Originally Posted by pll View Post
Thank you for your informative answer! I'm glad to know we are on the right track. We will be sure to check out our broker's credentials.

As far as our FICO score, right now it is at 720 and she is trying to raise our score to 760. I hope we can raise it.

Our goal is to try to buy down the PMI.
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Old 03-19-2012, 09:01 PM
 
Location: Austin, TX
20 posts, read 56,515 times
Reputation: 40
Quote:
Originally Posted by pll View Post
Thank you for your informative answer! I'm glad to know we are on the right track. We will be sure to check out our broker's credentials.

As far as our FICO score, right now it is at 720 and she is trying to raise our score to 760. I hope we can raise it.

Thank you for letting me know the credit scores you are working with. The only reason I guess she would be telling you to raise your credit scores is to try and get you more credits to help pay for the PMI costs.

I assume she is attempting to do what is called split edge PMI or possibly single premium PMI

Split Edge allows you to pay an upfront fee usually .5%-1% of the loan amount and then the monthly premium you pay will be a much lower premium

Single Premium is where you would pay for the PMI in a lump sum upfront. This tends to be pretty expensive at 1.5%-2% of the loan amount.

So if she is able to offer you a credit for your closing costs to help out with some of these costs then I could see how raising your credit score would be advantageous, but in reality once you cross the 740 mark it doesnt matter you will be offered the same rate, costs, credits as a guy with a 780 or 800 and then I can only see you gaining a small fraction maybe .25%-.50% of the loan amount.

Explore these options with her and see what is a better fit for your situation. stay away from Lender Paid Mortgage Insurance, this will drive your interest rate sky high and cost you more in interest than it will save you in monthly payments.

Hope I didnt give too much information, I tend to do that sometimes
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Old 06-04-2013, 11:17 PM
pll pll started this thread
 
928 posts, read 1,373,714 times
Reputation: 783
Quote:
Originally Posted by pll View Post
We will be purchasing a home this summer and we were wondering if it would be better for us to get our loan through our credit union or a bank? We have met with a mortgage broker and she said that she could get us a Conventional loan. We will have to raise our fico score by 40 points in 3 months..She informed us that this would be possible because we have good credit. I'm not sure if this is true.
Also, she informed us that she could do better then our credit union because they don't usually shop for the best loan for their customer. Our previous home was a FHA loan with our credit union.
We are not sure who to believe. We recently moved to CA which doesn't have the best track record for looking out for the best interest of the buyer so we are a little nervous.
Any advice would be appreciated.
We ended up getting a conventional loan through a bank with our raised fico score. Thank you for your help and good advice.
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