Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If shopping for a mortgage, how many companies should I get a Good Faith Estimate from?
Is every company I speak to going to give me a great GFE just to get me in the door and then things start changing when we get to the actual approval process? In other words, how reliable are GFE's?
Also, will it negatively impact my credit score the more times mortgage companies pull my credit report as I'm shopping around?
Mortgage proposals or GFE's can be used as tool to reel in the prospect. It is the consumers job to trust in or not trust in who they are dealing with. In other words you need to build a relationship and trust your judgement when going forward with someone. A Lender who quotes conservatively usually doesn't use this bait and switch tactic. However, they don't seem appealing at first they are usually the most trustworthy.
You can pull credit around 10 times in a 14 day span and it only counts as 1 inquery. If you pulled 11 or more than 1 time in 15 days than it starts to count as more.
If shopping for a mortgage, how many companies should I get a Good Faith Estimate from?
Is every company I speak to going to give me a great GFE just to get me in the door and then things start changing when we get to the actual approval process? In other words, how reliable are GFE's?
Also, will it negatively impact my credit score the more times mortgage companies pull my credit report as I'm shopping around?
People get good loans based on their credit score, the amount of money for the down payment , and their debt to income score. The GFE is only an estimate of the closing costs of your loan..
If you have a great score good income, etc... and sure you have no issues - go to a credit union and apply for a loan. Credit Unions are owned by members, not investors. The closing costs are less and possibly the lowest rate. However if issues come up - your application is dead.
If you have minor issues - go directly the conventional mortgage bank. Minor issues can be worked out, with a higher interest rate. They may have different loan programs available.
If you have major issues - choose a mortgage broker who can switch your loan between different lenders.
Answering your last question about your credit score - yes - if you have three hard pulls in one week your score will dramatically drop. Five hard pulls in one month will affect it as well.
People get good loans based on their credit score, the amount of money for the down payment , and their debt to income score. The GFE is only an estimate of the closing costs of your loan..
If you have a great score good income, etc... and sure you have no issues - go to a credit union and apply for a loan. Credit Unions are owned by members, not investors. The closing costs are less and possibly the lowest rate. However if issues come up - your application is dead.
If you have minor issues - go directly the conventional mortgage bank. Minor issues can be worked out, with a higher interest rate. They may have different loan programs available.
If you have major issues - choose a mortgage broker who can switch your loan between different lenders.
Answering your last question about your credit score - yes - if you have three hard pulls in one week your score will dramatically drop. Five hard pulls in one month will affect it as well.
GL
Thanks, good info!
I trust the guy I'm working with at this point but I just want to make sure I'm not leaving money on the table.
My credit scores are solid. I had one minor blemish that came up ($60 medical I wasn't aware of) that I took care of last week. He said because it was recently submitted (2011) it was having a larger impact than expected.
If I don't currently live in the state where I'm relocating. Would I need to join the credit union there to get a quote?
If your Loan Officer is provided a full loan application - your full name, gross monthly income, your SS# (s) so he/she can pull a credit report, the subject property address, the estimated value of the property and the estimated loan amount sought, and any other information that your loan officer deems necessary (that is usually enough except for unusual circumstances), then by law you have to receive a GFE within 3 days, along with a TIL (Truth in Lending).
His fees need to be accurate. Often times LO's will OVERestimate because there are certain areas on the GFE that cannot change and some that only allow a 10% variance in those fees. If over that, the LO absorbs the cost.
With that being said, the rate quoted can change until you are locked in. If the loan amount changes obviously your cash to close would change from the original quote (but you can adjust that by putting more down or borrowing more if possible). Your pre-paid items will be estimated because often times you do not have a closing date set yet, so you may be quoted 15 days interest. A good loan officer will look up the taxes on the property to give you a good estimate (this is one area that can change) and it is up to you to check on your homeowner's or hazard insurance premium.
If you are getting preapproved, don't have an actual property yet, the LO does not have to give you an actual GFE and many won't because they are bound by the fees quoted. They can however give you a sheet with the fees they charge, the rate that day and work some numbers for you so that you don't have to bring money to the closing table.
One thing I would suggest is that if you go to lender A on one day and are quoted 3.875, then go to Lender B 4 days later and the rate quoted is 3.75. Go back to Lender A (if you liked him) and ask what rates are. If doesn't mean Lender B's rates are lower, it means THAT day rates were lower than when Lender A quoted you.
I would ask the LO you talked to why they would not supply you with a Good Faith estimate. If you gave them all of the above info, then they are supposed to.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hi
