U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-14-2008, 12:05 AM
 
Location: northern california
380 posts, read 2,090,857 times
Reputation: 146

Advertisements

(Sorry for so many questions -- also please advise if this should be asked in Realt Estate forum instead)

We just signed our contract to purchase a home using a standard purchase agreement form (California). We have 17 Days to remove the loan contingency and appraisal contingency.

We were pre-approved for a 30-year fixed loan (Conforming Jumbo) before we shopped for houses. We are now "shopping" the loan to get the best rate/terms, using a broker and also talking to a couple of lenders directly. They all think they can get the loan approved and home appraised within 17-days, which is what our realtor said we'd want before removing the contingencies.

My questions . . .

Reading these boards, it sounds like it isn't really over when you get loan "approval," but only a "clear to close," which I think means the underwriter (not just the lender) has approved the loan? Does this mean we shouldn't be removing the loan/appraisal contingencies until we get a "clear to close" (which I assume couldn't be done within 17 days)?

Also, would an FHA loan take that much longer to get approved? We weren't considering them since we have very good scores and are putting 20% down, but one lender suggested we look into them for the lower rates.

Thanks for any help.
Reply With Quote Quick reply to this message

 
Old 06-14-2008, 09:09 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,946,881 times
Reputation: 1007
Clear to close means the borrower has received full loan approval.
There maybe funding contingencies that the attorney will need to meet, but not much to do with the borrower.

If you're in the FHA Jumbo range then you're most likely in the Conforming Jumbo range. You should get almost the same rates with the price you pay on a FHA.

With FHA you have to pay the 1.5% funding fee, and the monthly MIP (0.5%).

With 20% down you should avoid FHA especially with your high credit scores. Most lenders offer you or coax you into a product because that's the only good rates they may offer. I dont see any other reason in why they would make you go with FHA.

Please post your county/state, credit score, loan amount, etc.
Post what rate you're getting, and 'lender' fees, and we'll be able to tell you if you're getting a good deal or not.
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 09:40 AM
 
37 posts, read 203,903 times
Reputation: 23
I had the same issue with a lender. Pressure to get an appraisal done, etc., and I think their underwriter hadn't even seen our paperwork. Once they do the appaisal, even though you purchased the appraisal and will get a copy, they own the appraisal and may not release it if they choose not to.

A different lender now says we will get a "commitment letter" stating the loan is good to go based on the appraisal, inspection, etc. I will NEVER go forward with another loan until I know the lender will issue me a commitment letter (or whatever that particular lender calls it) before ordering appraisals, etc. The appraisal has NOTHING to do with your financial paperwork, so I don't see how you being financially approved for a loan would hang on the appraisal. The appraisal only means that particular house will meet the loan standards.

I'm a novice/normal person, but my gut feelings are in the same ballpark as yours.
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 09:50 AM
 
37 posts, read 203,903 times
Reputation: 23
QUESTION FOR RENRIQ02

So, if a lender is pushing FHA or any other particular product, it may be because that particular lender is having problems getting their loans approved with other products? Like they made risky loans and now can't get good rates for their clients? Do rates between lenders work that way?
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 12:19 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,946,881 times
Reputation: 1007
Some of them haven't updated their conforming limits so they're pushing the FHA. They also make more money on FHA loans.

Not much risk when you're putting 20% down and have a good credit score.

Quote:
Originally Posted by weartoomanyhats View Post
QUESTION FOR RENRIQ02

So, if a lender is pushing FHA or any other particular product, it may be because that particular lender is having problems getting their loans approved with other products? Like they made risky loans and now can't get good rates for their clients? Do rates between lenders work that way?
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 12:42 PM
 
Location: northern california
380 posts, read 2,090,857 times
Reputation: 146
Quote:
Originally Posted by renriq02 View Post
Clear to close means the borrower has received full loan approval.
There maybe funding contingencies that the attorney will need to meet, but not much to do with the borrower.
We don't usually use attorneys in Calif -- so would these funding contingencies be met by the escrow/title company, or the realtor?


Quote:
Originally Posted by renriq02 View Post
If you're in the FHA Jumbo range then you're most likely in the Conforming Jumbo range. You should get almost the same rates with the price you pay on a FHA.

With FHA you have to pay the 1.5% funding fee, and the monthly MIP (0.5%).

With 20% down you should avoid FHA especially with your high credit scores. Most lenders offer you or coax you into a product because that's the only good rates they may offer. I dont see any other reason in why they would make you go with FHA.

Please post your county/state, credit score, loan amount, etc.
Post what rate you're getting, and 'lender' fees, and we'll be able to tell you if you're getting a good deal or not.
Quote:
Originally Posted by renriq02 View Post
Some of them haven't updated their conforming limits so they're pushing the FHA. They also make more money on FHA loans.

Not much risk when you're putting 20% down and have a good credit score.

Wow, sounds like we really don't need to go FHA, which I also hear takes longer to process. The lender (Wells Fargo) said the rates were lower for FHA than the Jumbo Conforming, but even if that were true sounds like the benefit would be outweighed by the funding fee and MIP (mortgage insurance premium?).

We already were preapproved for Jumbo Conforming, but the rates were all high lately as you all know. I'll post our info and quotes after I hear back from the mortgage broker and credit union on Monday -- THANK YOU!!
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 12:44 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,946,881 times
Reputation: 1007
funding contingencies will be met by the title company.
nothing to worry about
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 01:01 PM
 
Location: northern california
380 posts, read 2,090,857 times
Reputation: 146
Quote:
Originally Posted by weartoomanyhats View Post
I had the same issue with a lender. Pressure to get an appraisal done, etc., and I think their underwriter hadn't even seen our paperwork. Once they do the appaisal, even though you purchased the appraisal and will get a copy, they own the appraisal and may not release it if they choose not to.

A different lender now says we will get a "commitment letter" stating the loan is good to go based on the appraisal, inspection, etc. I will NEVER go forward with another loan until I know the lender will issue me a commitment letter (or whatever that particular lender calls it) before ordering appraisals, etc. The appraisal has NOTHING to do with your financial paperwork, so I don't see how you being financially approved for a loan would hang on the appraisal. The appraisal only means that particular house will meet the loan standards.

I'm a novice/normal person, but my gut feelings are in the same ballpark as yours.
Ugh, sounds like you had a stressful experience.

The lender is not pressuring us to get the appraisal, although it is required for them to approve the loan. The 17 days we have for the appraisal is not necessarily because the financing requires it, but the purchase agreement (standard form language) says it is contingent on the house appraising at at least the sale price, and we have 17 days to remove that appraisal contingency.

A separate clause in the purchase agreement says our obtaining financing is another contingency of the agreement, and we also have 17 days to remove that contingency. So I was trying to figure out what should satisfy ourselves that we can remove the contingecy.


After posting my question here, I read in one of my housebuying books that the financing contingencies shouldn't be removed until we have a "Commitment" or "Loan Qualification" letter stating the size and type of loan and interest rate. It says this letter may be conditional, eg requiring house appraisal, before final loan approval. Does this sound right?

For you lenders/brokers -- what needs to be done before a letter like that is issued, and what typically still needs to be done afterwards?

Thanks everyone!
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 01:06 PM
 
Location: northern california
380 posts, read 2,090,857 times
Reputation: 146
Quote:
Originally Posted by renriq02 View Post
funding contingencies will be met by the title company.
nothing to worry about
ok, thanks.
Reply With Quote Quick reply to this message
 
Old 06-14-2008, 03:06 PM
 
37 posts, read 203,903 times
Reputation: 23
That letter you describe is what my new lender says they'll issue. She said it means the underwriter has looked at our financial paperwork and approved us for a loan required by the purchase contract and PMI (if needed) has also been approved. The letter then says you'll get the loan contingent on the house appraising, passing inspections, getting title work done, etc.

I won't work with any lender in the future that can't tell me upfront that they'll issue me that type of letter beyond the preapproval.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2017, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 - Top