how to shop for the best mortgage rates? (insurance, loan officer, interest rate)

[trusam]

i am living in raleigh, north carolina and have started thinking seriously about buying a house since yesterday. we are non permanent resi. aliens. i do not have a credit history due to my dependent visa status but my husband's credit score is 723. we got the pre approval letter from an online lender. we are offered 5 % for 15 years term with 0.75 t0 1 point. since this is our first house and housing market is going down and down every day, we have decided to be very conservative and not going for bigger house even though we can afford up to 550000. we are planning to put 20 % down and dont want to go beyond 375k. we are going to finalize the agent within next 2 weeks and then start house hunting. we are not impulsive buyers and ready to spend months before we find right house at right price.

we are canadians and do not have much information abt the complicated buying and lending procedures over here. i would like to know

1. are we on the right direction?
2. where should we go to get better rates?
3. how and when to lock the interest rates?
4. if the rate goes down after locking, can we break the contract and contact another lender?
5. is there a fee for locking?
6. when is the right time to lock the rate? now or after finalizing the house?
7 what if we decide to go for 20 or 30 years term instead of 15? or a bigger house than 375 k?

Thank you all for your replies.

[renriq02]

read below

Originally Posted by trusam

i am living in raleigh, north carolina and have started thinking seriously about buying a house since yesterday. we are non permanent resi. aliens. i do not have a credit history due to my dependent visa status but my husband's credit score is 723. we got the pre approval letter from an online lender. we are offered 5 % for 15 years term with 0.75 t0 1 point. since this is our first house and housing market is going down and down every day, we have decided to be very conservative and not going for bigger house even though we can afford up to 550000. we are planning to put 20 % down and dont want to go beyond 375k. we are going to finalize the agent within next 2 weeks and then start house hunting. we are not impulsive buyers and ready to spend months before we find right house at right price.

we are canadians and do not have much information abt the complicated buying and lending procedures over here. i would like to know

1. are we on the right direction?
2. where should we go to get better rates? broker, local bank
3. how and when to lock the interest rates? Lock the rate after you have shopped. Most lenders require that you have a home picked out.
4. if the rate goes down after locking, can we break the contract and contact another lender? yes, but the whole process starts all over. some lenders allow you to relock.
5. is there a fee for locking? some lenders may charge a 500-600 fee. I WOULD NOT PAY ANY FEES TO LOCK.
6. when is the right time to lock the rate? now or after finalizing the house? You want to lock AFTER you have found a home or UNDER CONTRACT. What if something happens, and you would need a lock extension? that can be expensive!
7 what if we decide to go for 20 or 30 years term instead of 15? or a bigger house than 375 k? If you go over the 417k loan amount, then your interest rate will change. If you decide to put less than 20% down then your rate will change or you will need to worry about paying mortgage insurance.

Thank you all for your replies.

[rcarrillo]

Originally Posted by trusam

i am living in raleigh, north carolina and have started thinking seriously about buying a house since yesterday. we are non permanent resi. aliens.

How long have you been living/working in the US? Also, how long has your husband had credit history?

Just make sure that its over 2 years. Some loan officers miss this if they do not have a lot of experience working with Foreign Nationals, but most underwriters now require it. This is true for Fannie Mae/Freddie Mac conforming loans, there are still a few programs for those with <2 years but that could change your interest rate and terms.

This applies to anyone that is a permanent resident, on a VISA or any other status other than citizen.