American Federal Mortgage: Too good to be true? (Nutley: mortgage broker, credit)

[CaptainNJ]

does anyone know where i can look to see how the rates are impacted by the market as its going? im aware that the rates change each day and sometimes change several times during the day but i dont know where to look to see how they are moving during the day.

[nemmert]

Honestly, they don't move enough to matter... I generally use Bankrate every week or two just to see if things have dropped 1/4 point or so which is about 15 cents per $1,000 borrowed on a mortgage payment.

[CaptainNJ]

i was just thinking about my conversation with the guy from there last night and now im wondering something. the guy that got back to me from there called me about 6:45pm and then tried to push me (while telling me he isnt pushing me) to lock before 8pm. he said he was catching up with calls at the end of the day because he was busy. however, im thinking thats a tactic to get people to make quick decisions at the end of the day. im just trying to figure out if i should hold it against him or not.

[MoorestownResident]

Guys, this feel good stuff about this company in this thread is nothing but fodder. OK, I don't have first hand experience with them but I am an investment, financial, economics senior level professional. There is NO WAY that company is not rolling heavy fees into the loan and then telling you that fees are X amount out of pocket. There is no free lunch.

These loans are all priced at the same level across the industry. If there is a substantial difference in the quoted rate and closing costs, it is due primarily to smoke and mirrors and how the loan gets structured. All the loan pricing is very close across all lenders, the difference between lenders these days is loan servicing and credit access, and the fact that some lenders operate on high volume, thin margins and lower overhead. If it looks too good to be true it will be in 100% of the cases unless you are dealing with a close friend and/or relative, even in those cases, be suspicious.

[CaptainNJ]

Originally Posted by MoorestownResident

Guys, this feel good stuff about this company in this thread is nothing but fodder. OK, I don't have first hand experience but I am an investment, financial, economics professional. There is NO WAY that company is not rolling heavy fees into the loan and then telling you that fees are X amount. No chance.

where are they rolling it in? their rate was slightly lower than a quote i got from someone else (theirs 4 7/8, other 5). the fee he quoted me, if im correct, is 400 for the lender fees as opposed to about 1,400 i see at another place so thats much cheaper.

[O-er in WO]

When we closed with HSBC their fees where $495 application and $350 appraisal + a small Fedex charge, that's all. All other things like, title search, title insurance, recording fees, escrows, etc., which along with lender fees are commonly referred to as closing fees, are not charged by the lender. So, the above quote seems reasonable. Just make sure there isn't interest points buy down, and ask about the appraisal fees (did they wave it? or is it part of the $400 quoted). When you get your HUD, before the closing, scan every fee and see that no junk fees, like a broker fees or whatever are in there, question every charge that you didn't expect to see in the HUD.

The only downside that I see is the 30 days lock vs. 60 days lock that is offered by a conventional lender. If I was just out of an attorney review, I would want more than 30 days to do inspections, and other due diligence things (permits and such). Unless you are absolutely sure that rates won't go up until your are ready to close and is willing to wait, then 30 days lock may work for you.

[tmolly]

Thanks for all the helpful responses, everyone.

I spoke with the rep from American Federal Mortgage again yesterday, and when I told him that I'm nervous about hidden fees or other gimmicks, he sent me a "Description of Charges" document whereby they guarantee in writing that all the lender's fees (the "800s") will not be more than $725. This was much more helpful to me than the GFE (also provided), since it was a guarantee and not an estimate that can change. He also guaranteed in writing that there are no origination fees or discount points.

He was very prompt at responding to phone calls and emails, even when I was still badgering him with questions well past office hours.

As for locking in the rate (which was still 4.75% yesterday), I would not say I was "pressured" to lock in. He did mention that in order to process the rate lock at Monday's rate, he would need to submit all the signed documents and CC info by 6:59am Tuesday morning. However, he didn't imply that the rate would be going up or down on Tuesday -- like anyone else, he said he couldn't know that.

After much deliberation, my husband and I decided to submit our paperwork for the 4.75% 50-day rate lock, as we were very comfortable with all the information we reviewed in writing. I'm glad I did... the rate was 4.875 today!

Today, we submitted the loan application and all supporting docs... so far, no surprises and everything seems to make sense. I'll definitely report back when we close *knock on wood* to let you all know how it went.

Thanks again!

[KL72]

I locked with Wells Fargo yesterday at 4.65% with 1.125 point paid. I'm happy with that.

[tmolly]

That's great -- we had the option to lock in with American Federal Mortgage at 4.50% with .75 points, but we just don't have the cash on-hand to pay for the discount upfront (all our $$ going towards down payment and closing costs)!

[KL72]

I did call American Federal Mortgage before locking with Wells, but unfortunately they don't do 1st and 2nd mortgage splits and their jumbo loan was at 5.5%. In fact, I couldn't find any lender at all that does 1st and 2nd mortgage loans anymore on a new home purchase!