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I am looking to close on a co-op in NJ and my head is spinning. I have read and researched and asked a zillion questions to the lenders. However, I am still a bit lost as none them appear to be upfront with the needed details. No GFE or APR quotes without an app. but how to choose who to apply with?
The lenders I am considering are Citibank, and Sovereign. If anyone has closed with either I would love to hear how it went. Did they keep close to their quotes for closing costs/rates?
I really could use some help understanding how this works. Here are today's rates listed on their websites for a 30 yr fixed loan:
Soverign: rate is 3.625 and APR is 3.784 (no points) based on 30% down
Citi: rate is 3.625 and APR is 3.773 (.625 points) based on 25% down
If anyone can help me break this down it would be really great. It appears to me that citi would be the best rate because of the lower APR except I don't understand the points. Just how many points = .625 ? Also, if I am paying for several points shouldn't the APR be higher?
P.S. Citi's closing cost appear to be about $560. lower than Soverign's
I am looking to close on a co-op in NJ and my head is spinning. I have read and researched and asked a zillion questions to the lenders. However, I am still a bit lost as none them appear to be upfront with the needed details. No GFE or APR quotes without an app. but how to choose who to apply with?
The lenders I am considering are Citibank, and Sovereign. If anyone has closed with either I would love to hear how it went. Did they keep close to their quotes for closing costs/rates?
I really could use some help understanding how this works. Here are today's rates listed on their websites for a 30 yr fixed loan:
Soverign: rate is 3.625 and APR is 3.784 (no points) based on 30% down
Citi: rate is 3.625 and APR is 3.773 (.625 points) based on 25% down
If anyone can help me break this down it would be really great. It appears to me that citi would be the best rate because of the lower APR except I don't understand the points. Just how many points = .625 ? Also, if I am paying for several points shouldn't the APR be higher?
P.S. Citi's closing cost appear to be about $560. lower than Soverign's
THANKS SO MUCH!!!
The rates listed on websites is pretty much useless. You need to get a quote.
When I was shopping for mortgages, I was told by multiple brokers to look at the APR, which is suppose to incorporate all your closing fees, including points. You don't have to fill out the full loan application in order to get a quote. However, they do tell you that if the info you give them for a quote is different than the info they get from pulling your credit, your quote is obv. going to change.
You may not be able to get a GFE (since those are binding and you cannot close if the actual mortgage costs are too high above GFE), but you can certainly get a rate, APY, origination fee, appraisal fee, monthly payment estimate. Stop by your local branches or call a couple mortgage desks and see what you can get.
Thanks so much for your advice! How come the rates on the websites are useless? I was really thrown off yesterday as I was discussing rates with several lenders that did not seem to add up with the info on there websites. They had all been informed of my recent myfico credit scores. Also, all quotes were supposed to be without points.
Here is what was tricky:
Bank 1 gave me the same quote as listed on their website however the website notes that the quote is for 30% down when I am only doing 20%. I told the lender and she said that her quote was accurate and she didn't know why the website said that.
Bank 2 said they cannot give APR. So I matched the interest quote given with what was on the web to see the listed APR. I was thrown off because the matching numbers was for a rate with points. In addition, the website stated is was for a 25% down purchase. I reminded the lender, I was only doing 20% down and no points and she said that the quote would never be accurate without putting in the application for a GFE.
Bank 3 also said they cannot give APR. So again I tried to match the interest quote given on the website. This time I was really thrown off because the matching interest rate was for an FHA rate and with 25% down. I was never interested in FHA. The quote for the regular 30year fixed rate was much higher. I contacted the lender to make sure she understood I was not interested in FHA and she also said that the quote would never be accurate without putting in the application for a GFE. On top of all that she had told me earlier their posted rates are based off of a 740 score. Ironically, I had failed to mention my same 740 credit score before she gave me the quote. So especially in this particular case why would I be getting a lower quote then the website?
My head is really spinning, I feel like I am getting such a runaround. Does shopping for a mortgage really mean paying for a bunch GFE's? This seems so crazy to me, as some of the app fees are $900.00 a pop.
I went with Wells Fargo twice. Decent rate and great experience both times. Handled all my questions, got me all of my forms on time and the check was there for an on time closing. For me, choosing a mortgage provider wasn't about who was giving me the absolute lowest rate. It was finding a place with reasonable fees(the most important thing here is that they are transparent), competitive rates and great customer service. Getting caught up in worrying about 1/8th of a point is a waste of time IMO.
I'm not sure why the banks you are working with are giving you such a hard time. Even if they don't give you an APR, they should be able to tell you 1) the rate 2) the monthly payments (excluding escrow since that will be the same no matter where you go and that does need an application since they need to figure out your exact taxes, insurance rates, etc) 3) their origination charges 4) their estimated appraisal fee 5) other fees (e.g. the application fee you're talking about). If the lender can't tell you those things without making you pay the application fee, they're probably not worth working with. This is standard info and I did not have a problem getting that info from the companies I called for quotes.
The reason the rates on the websites are bogus is that
1) they're often "national" average and not quoted for your specific zip code (e.g. when I asked for a quote for Jersey City, my rate was 0.25% higher than when I asked for a quote for my parents zip code in South Jersey).
2) Also, as you've seen, they use diff. down payment thresholds. I asked for all my quotes to be 20% down, and some brokers have countered back that if I went up to 30% or 40%, I can get an additional 1/8 point off.
3) Lock periods can be different... some places gave me great quotes but for 30 day lock and I had to pay something like ~$100 a day (lowest price) beyond the period to having to re-lock. I asked for all my quotes to figure a 45 day lock period just for safety, which will increase your quote because bankers prefer shorter lock.
4) Lastly, all the website rates figure for a SINGLE FAMILY HOME, which is the cheapest to mortgage. I was shocked to find that for a condo, I had to pay anywhere 0.25%-0.50% higher (was told it was a Fannie Mae thing). Some lenders don't do condos/coops at all.
So, in summary, I agree with the other posters who say to go ask around the smaller local banks and credit unions if the big ones aren't being helpful, but just keep in mind that not everyone will be able to extend a loan for coops. I went into my purchase last spring thinking "how hard could this be" and only getting more and more confused as you're feeling now. I ended up closing my mortgage with Carl Casperson at American Federal Mortgage and am very happy. Good luck!
I'm not sure why the banks you are working with are giving you such a hard time. Even if they don't give you an APR, they should be able to tell you 1) the rate 2) the monthly payments (excluding escrow since that will be the same no matter where you go and that does need an application since they need to figure out your exact taxes, insurance rates, etc) 3) their origination charges 4) their estimated appraisal fee 5) other fees (e.g. the application fee you're talking about). If the lender can't tell you those things without making you pay the application fee, they're probably not worth working with. This is standard info and I did not have a problem getting that info from the companies I called for quotes.
The reason the rates on the websites are bogus is that
1) they're often "national" average and not quoted for your specific zip code (e.g. when I asked for a quote for Jersey City, my rate was 0.25% higher than when I asked for a quote for my parents zip code in South Jersey).
2) Also, as you've seen, they use diff. down payment thresholds. I asked for all my quotes to be 20% down, and some brokers have countered back that if I went up to 30% or 40%, I can get an additional 1/8 point off.
3) Lock periods can be different... some places gave me great quotes but for 30 day lock and I had to pay something like ~$100 a day (lowest price) beyond the period to having to re-lock. I asked for all my quotes to figure a 45 day lock period just for safety, which will increase your quote because bankers prefer shorter lock.
4) Lastly, all the website rates figure for a SINGLE FAMILY HOME, which is the cheapest to mortgage. I was shocked to find that for a condo, I had to pay anywhere 0.25%-0.50% higher (was told it was a Fannie Mae thing). Some lenders don't do condos/coops at all.
So, in summary, I agree with the other posters who say to go ask around the smaller local banks and credit unions if the big ones aren't being helpful, but just keep in mind that not everyone will be able to extend a loan for coops. I went into my purchase last spring thinking "how hard could this be" and only getting more and more confused as you're feeling now. I ended up closing my mortgage with Carl Casperson at American Federal Mortgage and am very happy. Good luck!
Good advice for most situations, but I don't think that all of the smaller lenders deal with co-ops.
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I have read and researched and asked a zillion questions to the lenders. However, I am still a bit lost as none them appear to be upfront with the needed details. No GFE or APR quotes without an app. but how to choose who to apply with?
