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Old 06-23-2015, 10:56 PM
 
133 posts, read 114,450 times
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Not a veteran, currently saving up for 20% down for conventional to avoid the mandatory lifetime PMI with FHA.

I've seen several GFEs (good faith estimates) from lenders and shocked at how much they charge. I noticed Costco has a home loan program where the lender fees (for executive members) are capped at $600, whereas I know traditional lenders charge ~$1500.

Costco's program is similar to Zillow/Trulia's where it displays rates from different brokers. Even when you factor in the appraisal fee it looks like the total cost ends up being ~$800 which is still significantly less than traditional. Is this a good way to go or is there something better?
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Old 06-23-2015, 11:39 PM
 
3,317 posts, read 7,251,326 times
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So you are shocked that a bank, that lends you several hundred thousand dollars, has the audacity to charge $900 more than Costco.

I truly hope that you are able to find a lending source that charges even less. Best of luck to you.
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Old 06-24-2015, 06:55 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
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Golden, may I suggest a credit union? It wasn't until I worked for one, and even then it took six months for the full impact to sink in, credit unions are non profits. By their very nature, each member is an owner, there are no stockholders to please, no board of directors demanding increased profits. And unlike Costco, where discounts are negotiated upfront, credit unions take any potential profit and provide the member with the immediate benefit.

Credit unions' membership requires a common interest for eligibility. However, many, like mine, are easy access, meaning, you can join an association that permits entitlement to join that credit union.

Some of the mortgage benefits that really add up include - current fees at $650, no additional "add-ons" for condos, co-ops, combo loans (to avoid PMI) all quotes for 60 days, no pricing add-ons for cash out, no seasoning requirements for refinances, financing for homes recently on mls, lower mortgage insurance rates.....all on top of flexible underwriting guidelines. (Note: flexible UW does not mean rough credit. What it does mean, only on the part time job for one year - bring it on.....assets/income from out of the US - bring it on). YMMV with your individual credit union with what they offer, but do take a look - your wallet will thank you.

Last edited by SmartMoney; 06-24-2015 at 07:27 AM.. Reason: Added discounted mortgage insurance rates.
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Old 06-26-2015, 10:56 AM
 
4,542 posts, read 11,542,319 times
Reputation: 3063
Quote:
Originally Posted by GoldenKiwi View Post
Not a veteran, currently saving up for 20% down for conventional to avoid the mandatory lifetime PMI with FHA.

I've seen several GFEs (good faith estimates) from lenders and shocked at how much they charge. I noticed Costco has a home loan program where the lender fees (for executive members) are capped at $600, whereas I know traditional lenders charge ~$1500.

Costco's program is similar to Zillow/Trulia's where it displays rates from different brokers. Even when you factor in the appraisal fee it looks like the total cost ends up being ~$800 which is still significantly less than traditional. Is this a good way to go or is there something better?
fyi-you don't have to go 20% to not get stuck with lifetime PMI. You can do conventional loans with 5%, 10%, or 15% down where the PMI will drop off a few years down the road. You can also do lender paid PMI or lump sum PMI where there is no monthly charge, it get rolled into the interest rate or the closing costs. Many options out there, so you should explore them all.

That said, 20% down is still typically the best route to go.

There are also many options when it comes to rate & costs. You can't shop just one, you need to look at the whole picture. Just because one lender has lender fees capped at $600 doesn't automatically make it better than a lender with $1,500.
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Old 06-26-2015, 12:08 PM
 
Location: Phoenix, AZ area
2,931 posts, read 2,389,174 times
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Quote:
Originally Posted by TimtheGuy View Post
There are also many options when it comes to rate & costs. You can't shop just one, you need to look at the whole picture. Just because one lender has lender fees capped at $600 doesn't automatically make it better than a lender with $1,500.
Also known as APR and the only true way to compare mortgages. APR takes all the fees you are paying on the loan and adds it to the interest rate to give you a simple rate to compare each loan. A loan with a low rate and high fees can easily have a higher APR than a loan with a higher rate and lower fees. Always compare APR.
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Old 07-02-2015, 11:53 AM
 
Location: New York
2,251 posts, read 4,160,232 times
Reputation: 1607
Quote:
Originally Posted by AZ Manager View Post
Also known as APR and the only true way to compare mortgages. APR takes all the fees you are paying on the loan and adds it to the interest rate to give you a simple rate to compare each loan. A loan with a low rate and high fees can easily have a higher APR than a loan with a higher rate and lower fees. Always compare APR.

Well Said above.. Agree with Smart Money - a credit union is to best way.

A strong point to aim for - if you are looking to stay in the home for a long time, you want the lowest interest rate (showing more costs). Than a loan with less costs and a higher interest rate, paying more over the life of the loan.....


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