Quote:
Originally Posted by aheadofthecurve
Hi Everyone. I'm considering a new house and would like to find the best mortgage with the best rate that I can. How strategy would everyone suggest to accomplish this? Are there any good websites with the best lenders? All comments are much appreciated!!!
|
My wife and I just had a conversation about this as we finally locked in our mortgage today:
1.
Knowledge is power. If you don't know how to read a HUD-1, and understand what fees are junk, and what fees are compulsory, you'll be raked over the coals. I recommend Carolyn Warren's
book, particularly if you don't know a thing about mortgages. I also bought
Mortgage Confidential by David Reed but I tended not to refer to it as much as Ms. Warren's book. Finally, you will learn a lot by just shopping around, reading online, and perusing these forums.
2.
Comparison shop. I sent one mortgage broker a note stating that I didn't think she was going to be competitive but I appreciated her time and effort. Within 1-2 hours she had a counteroffer that was priced better than the competitor. Unfortunately, she couldn't offer me a second mortgage product (the first could), so while she beat their offer on a 1st mortgage by 0.125%, it wasn't going to pan out in the end. I spoke to a lot of bankers and generally one mortgage broker.
What I found interesting was that this particular mortgage broker had been quoting me higher prices (e.g. 1% origination instead of 0.5%) and higher rates than I had been quoted elsewhere. This is what drove me to write her the note. When I revealed to her that competitors had her beat, her numbers suddenly looked significantly better. Don't be afraid to haggle. After that, I realized I had much more leverage than I had previously thought.
3.
Get your latest credit report, and FICO score. Getting your credit report is free (annualcreditreport.com) and
does not affect your credit score. If you go through the government-established website (above), then you can get your FICO score for a discount relative to the equifax website directly (I think it saves you $6 or so). You need to know your score so you can better negotiate the rate you deserve.
We locked in:
First mortgage: 4.875% at 0.5% origination, 0% points, typical fees. The only "junk" fee I was charged was $300 for "underwriting fee" which I didn't fight.
Second mortgage: 6.5% no fee, no prepayment penalty for a 10 year call balloon mortgage.
I was counter-offered 4.75% by more than one bank and broker, but no one could get me a decent 2nd, and the first bank was unwilling to give me a second behind someone else's first. Study your situation, you may need something unique. Overall, my blended rate is < 5.5%, which is great for what amounts to a jumbo loan.