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We just reached an agreement on a house. The closing date is set for
Sept. 25th 2009. The sellers are still looking for a house and may be out
sooner, but must be out by then.
I am working with a solid local bank who supposedly has low fees, and
great service etc. We will be doing an FHA loan. If we were hypothetically closing today I think I could get a rate of around %5.25.
I don't want to have to go over %5.5 when the time comes. My lender
said that a 60 day lock would cost me an eighth of a point.
My question is should I lock now (90 day). Or wait seven days to do a
60 day lock risking it will be higher then and I may have to wait instead
and sweat it out? Or what? Also if anyone knows in more detail what
the cost involved is, and what would be the smartest way to play it.
This is my first home purchase and it seems no matter how much research
I do, there is still a fair amount of mystery and suprises around every
corner. Can someone with recent experience, or a mortgage background
throw me some good advice? Thank you very much in advance!!
The 1/8 is a pretty standard charge for an extended lock -- you might be able to ask if they can give you "float down" for that cost, or if that "costs extra". That way if rates drops you win.
5.25 is an awesome rate, and if that is without points you should be in great shape.
There are other ways to go, like getting money at closing to buy down a rate and other tricks that you might consider, but get a GFE from the lender and then check it out against others to be sure that their reputation is based on fact.
I'd wait... but it depends on your tolerence for risk. There is no correct answer. Ask if their is an option to float the rate down if rates drop. For example, if you lock for 90 days, but 30 days before closing the going rate is 5%, can you "relock" at some cost... if so, what is the cost?
Okay, I stopped by the lenders office with my docs, and she sent me
home with paperwork to "fill out" and send back.
I have been preparing the most I can to know what to expect, but there
were still a few surprises. I close on 9/25 so I am going to wait until
under 60 days to consider lock (next Monday I think). I will ask about
the float etc.
This is an FHA loan which will be for a home purchase of $175k. I am
putting %3.5 down (*$6125). Add upfront PMI $2995..they have the
amount of the actual loan at $171,xxx.xx.
The big question is they show a RATE: %5.375 but APR 5.945, that is
a larger gap than any I have seen on my quotes. The payment says $962.20 on the GFE, but $1040 on the truth in lending disclosure, what's
up with that. I am aware that they may have built in the closing costs
into the rate or something? but there is an odd # left stated I need at
closing (besides down payment/1st year hzard ins/3 months taxes. SO??
The Bank I am using, supposedly has low fees and a great reputation etc.
but the quotes I get on zillow are coming in lower. Can I get some help
deciphering a few things before I talk to her. I don't understand the
Pre-Paids thing. I plan to pay $510 to inspector, $490 for appraisal, and
a $500 check to the title co. prior to closing. What # do those come out
of and how do I actually total the "Closing costs"? I am going to grill her
on all of this I just thought I would see if someone with experience on here could offer me some inside tips before I do. Also any particular
"Junk fees" I should look out for? THere are $598 total under title costs,
but I already handed over a $500 check made out to a title co.??
That must be it. That figure on that sheet must be the P&I payment
+the Monthly $77 mortage insurance. That makes sense and doesn't
change the total payment which includes everything. That just threw
me off a bit. THANKS!!
After reviewing all the paperwork, everything seems to add up, and make
sense. Seems to be low fees, and everything looks good. I still
don't understand the difference between the rate %3.275 and the APR %5.9xx. I am talking to the bank tomorrow after we sign stuff tonight.
Got the home inspection tomorrow, house is only 11 years old so should
be good. Then the appraisal, after that I guess we can relax until something screws up at closing to give us one last shot of stress before
the move. Thanks for the help everyone.
That must be it. That figure on that sheet must be the P&I payment
+the Monthly $77 mortage insurance. That makes sense and doesn't
change the total payment which includes everything. That just threw
me off a bit. THANKS!!
After reviewing all the paperwork, everything seems to add up, and make
sense. Seems to be low fees, and everything looks good. I still don't understand the difference between the rate %5.375 and the APR %5.9xx. I am talking to the bank tomorrow after we sign stuff tonight.
Got the home inspection tomorrow, house is only 11 years old so should
be good. Then the appraisal, after that I guess we can relax until something screws up at closing to give us one last shot of stress before
the move. Thanks for the help everyone.
The APR reflects all the cost associated with the loan--getting that rate. what you will be paying monthly is based the rate (the 1040). In otherwords, if Bank B was to give you a new 5.275% rate with some cost, how would you compare with the one you have now? Add all the cost on the new 5.275% to get the APR and if this APR is more than 5.9xx then you would tell Bank B--thanks, but no thanks. Does that make sense?
Yes thank you for that explanation. Clear as a bell. I did a customized
quote search on zillow.com and found I couldn't beat it, and the few
that did weren't too far off enough to gamble on their reputation, speed
and convenience vs. the highly recommended bank I am working with right
up the road.
At what point is it too late to back out of a contract on a home?
At what point is it too late to switch lenders? Any hot tips on how
to know if you are getting the best deal they can offer?
Oh yeah, on the Truth in lending disclosure said X May have a pre-payment
penalty. How do I avoid that, or is that common?
Getting ready to hand over the first round of paperwork, and I am
pretty confident in this lender and house but you never know.
Thanks
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Thanks for the responses
