Mortgage through realtor or find your own, whats best? (mortgage broker, broker)

[VickiR]

Originally Posted by emme313

We dont have a credit union, but I have heard of people having great dealings with them, My mom uses hers for everything, car loans etc. I do agree though about the prequal. I know you get preaproved for a particular amount, and then when you put in a bid for a house, dont they adjust the prequal for that particular amount? That way I guess you have the ability to go back and forth on price without them knowing what the amount you are preaprovved for and using that in that bargaining.

Its great to have the lender pre qual you BEFORE you begin shopping for a home, so you know what you can afford and what you really want to spend! Lenders will loan you any amount if you have good credit! I had clients that were thrilled to find out the lender would loan them $400,000 but when we discussed how much their monthly payment would be, they quickly nixed that idea!

Once the lender has given you the amt. you qualify for and once you have decided how much you really want to spend, thats the hard part.

I then wait until we are ready to put an offer on a home and have the lender use the ADDRESS on the prequal as oppossed to using an amount. Therefore, the letter would state that "Mr. and Mrs. Buyer are prequalified to buy the home at 333 Great House Lane".

Vicki

[Indigoblue]

Originally Posted by emme313

wow, thanks that is all good advice, I guess we will "shop around". I guess it would be better to go with a mortgage company in the NC area? Anyone have any recommendations as to where to start?

I got four quotes. One from my bank, one from our credit union, and two from the mortgage brokers my realtor recommended. The credit union had the best deal by far but they took a MINIMUM of two months to process things and we wanted to move in fast - I didn't want to live alone with the four boys for months We ended up using one of the mortgage brokers our realtor recommended. My realtor's office only recommends brokers they know work fast and don't push you to spend more than you feel your budget will allow.

PM me if you want the contact info for either my realtor or broker. The broker was phenomenal. She sent me a huge relocation package with a bag of peanuts (her family owns a NC peanut company), handled complications that came up extremely quickly, and wrapped the whole thing up VERY FAST. We made great use of overnighting things (she had my copies of important papers picked up from my front door), and scanning/emailing what we could.

She started processing the mortgage applications (we have two mortgages) on a Tuesday, and by the following week's Friday had the "package" delivered to my realtor's office. She got me great rates with very reputable companies. Part of that was due to our credit scores and other factors, but I knew from talking to other brokers and looking at the online websites that she found me great rates (5 7/8% - zero points on the main mortgage, and 8% on the little mortgage, no mortgage insurance).

We could have gotten 100% financing (all one mortgage, no mortgage insurance) at 5 7/8% with 1/2 point through our credit union, but we valued living together asap over the savings in interest and went with the faster deal we could get through the broker. We were also told that credit unions often drag their heels and have a lot of red tape, and the "two months MINIMUM" thing sounded ominous

[southernlady5464]

We prequal'ed for this one based on our house we left NOT selling. Told our lender to leave it in the equation. That way we didn't have to worry about selling it before we bought this one. Yes, it meant much less house but once we do sell that one, it also means MUCH less outgo later. And we can go ahead and start on our purchase plan for our retirement home then. Liz

[Indigoblue]

Originally Posted by VickiR

Its great to have the lender pre qual you BEFORE you begin shopping for a home, so you know what you can afford and what you really want to spend! Lenders will loan you any amount if you have good credit! I had clients that were thrilled to find out the lender would loan them $400,000 but when we discussed how much their monthly payment would be, they quickly nixed that idea!

Once the lender has given you the amt. you qualify for and once you have decided how much you really want to spend, thats the hard part.

I then wait until we are ready to put an offer on a home and have the lender use the ADDRESS on the prequal as oppossed to using an amount. Therefore, the letter would state that "Mr. and Mrs. Buyer are prequalified to buy the home at 333 Great House Lane".

Vicki

A Vicki quote stuck with me as the hubby and I were discussing our budget - "you have to be able to feed your children!". Hehe. Excellent advice It's very tempting to spend close to what you pre qualify for, but when you figure out what the monthly payment would be...it's a scary thing

[MrsSteel]

Originally Posted by Indigoblue

We were also told that credit unions often drag their heels and have a lot of red tape, and the "two months MINIMUM" thing sounded ominous

Indigoblue, I'm sorry to hear that you had so much trouble with the credit union you contacted. We had a very different experience with our credit union. There was less "red tape" than with the other lenders & they were able to get everything done in just 2 weeks! I guess this just goes to show how much things can vary.

Vicki makes some excellent points! You may qualify for a loan that is much larger than what you can really afford to pay. It's important to do your homework on that & decide how much you really want to spend on a mortgage per month. I know my husband and I could have qualified to buy a much bigger home, but we knew that we didn't need to, nor did we want to!

[Indigoblue]

Originally Posted by MrsSteel

Indigoblue, I'm sorry to hear that you had so much trouble with the credit union you contacted. We had a very different experience with our credit union. There was less "red tape" than with the other lenders & they were able to get everything done in just 2 weeks! I guess this just goes to show how much things can vary.

That's great!! Which credit union are you guys with? Ours is Navy Federal.

We figured if the second mortgage's interest rate ever bugged us enough we might refinance

[emme313]

It is true! When you get prequaled its like they are telling you how much house they think you can aford if you eat mac & cheese every day! I didnt think about going through my current bank, I guess I could try that as well. Its commerce bank, I assume they have those in NC?

[rwally]

"Check with at least 3 different institutions. If you find a company that you like but they don't have the best rate, see if they're willing to match what the cheaper company has offered. Sometimes they are, sometimes they aren't. When you're making a purchase as major as this, you really need to do your homework in order to get the best deal."

If you want to shop for the best deal, call a mortgage broker, a retail bank (think Wachovia or BBT), a credit union and a national mortgage lender (like Countrywide) for quotes. In order to compare "apples-to-apples", you'll need to call them all within an hour or two. Why? Because rates change daily and sometimes during the day based on what’s happening in the mortgage bond market. Comparing a "yesterday" rate with one you just received today is "apples-to-oranges". Tell them the rate you want – if you want 6.0% say so. If it’s on their price sheets for the day you call, they can quote it. If they tell you 6-1/8% is the lowest on the sheet, ask if they can get an “off-sheet” price for 6.0%. Then tell them to prepare a quote with the specified rate plus the discount points to get the rate you want (if any are required), the origination fee they will charge and the APR. You could also ask for a GFE (Good Faith Estimate – a listing of all the settlement costs) but you may not get it. Why? Because the originator isn’t required by law to give you one until you submit an application. And one other thing, unscrupulous originators will intentionally low-ball some of the fees on the GFE as well as omit others. So if one GFE looks REALLY GOOD, it may change by the time you get to closing.
-----

"I always have my clients get a GFE from that lender and then give it to one of the lenders that I use. My lenders will review it and if they can beat it, they will. Its just a free service to me and to my clients."

It’s easy to score a perfect 100 on a test when you have all the answers. To be fair to the lenders you contact, don’t share one’s GFEs with another. Of course, if you feel strongly about doing so, you might also consider using one realtor’s commission rate quote and the list of things they'll do to find your dream home to negotiate a better rate of commission and a longer list of free services with a different realtor.
-----

"Lenders will loan you any amount if you have good credit! I had clients that were thrilled to find out the lender would loan them $400,000 but when we discussed how much their monthly payment would be, they quickly nixed that idea!"

Lenders will qualify you for a mortgage loan based on several criteria of which one is your gross monthly income. The front-end ratio (also know as the top, or housing expense ratio) and the back-end ratio (also known as the bottom, or total debt ratio) are used to calculate the maximum amount of your monthly income that can be allocated towards a mortgage payment. Ratios vary according to the loan program and lender; however 28% and 36% are common numbers. So for this example, if you and your husband have a combined gross monthly income of $10,000 and other monthly debts (car loans, student loans and credit card payments) of $1,000, the maximum you will be approved for (using the 28% and 36% limits) is the LOWER of the two calculations. The front-end ratio yields a maximum payment of $2,800 PITIHOA (principal, interest, taxes, insurance and homeowner association dues). The back-end ratio yields a max payment of $2,600 (36% of $10,000 less the other monthly debts of $1,000). So, the maximum mortgage payment you could qualify for based on ratios of 28% and 36% is $2,600. If the house you want to buy and the best interest rate you can get yield a payment above $2,600, you’ll need a larger down payment, a lower interest rate or a different loan program with higher ratio limits. Or some combination of the same.

[DebbieF]

Originally Posted by VickiR

Try to find a lender that has an office in this area, since you will be moving here.

That way...if the lender screws up...your Realtor can go to his office and strangle him!!!

Vicki

Vicki,

laughing again. You seem to make me do that alot. Have an awesome day.

Debbie

[House Lady]

this topic. I see people fight like crazy over a few dollars on the sales price then throw away many times more on a loan. Unfortunately, it isn't all that easy to shop. The previous comment about rapid rate changes are true, and you may not receive a quoted rate unless you "lock" it in, the procedure for which can vary from institution to institution. Worse, though, is the fact that the fees the company charges and other closing costs can very tremendously. Just calling up and saying "What is your rate? is not enough. You really need to know what the APR will be. That figure takes into account many of the fees that will be charged. You need a quote on what your monthly payment will be and the total interest you would pay if you actually paid off the loan over the entire term. You need to know what their closing costs/fees will be. get anything you can, and get it in writing, to help you compare all those apples, oranges and other fruit out there. Be sure you are comparing the exact same type of loan, too. There are many types out there. To give the most accurate quote, the company needs to have your credit scores. The problem is that after you tell them your social security number and they run your credit, they may not share that score with you. You may need to give them all your SS#. Your score does get dinged a little for these inquiries, but it usually does not affect your status as it is expected that people will shop for a mortgage. In the end, it is usually better to stick with well know institutions and work with a local loan officer. Use Lending Tree and such at your own peril. I have seen companies switch rates at the last moment, delay closings for days, etc. I learned to warn my clients that if they do use these sites, to choose that well-known company, if any show up, for their loan. Read rwally's comment again and listen to Vicki. A reputable local lender is way better. They know the local practices (which can vary greatly) and seldom delay a closing. Some parts of the country have a more laid back approach (good companies hustle like crazy here) and don't know the local practices. Closings are often delayed and there are extra "surprise" fees sometimes.
I have a lot of relocation company business and therefore have seen the kinds of problems that can occur when the client chooses to use a company "from back home" or that does not have a local office. Problems sometimes occur with relocations companies, too. Relocation companies often hook up with vendors that are not as effective because the vendor has agreed to give the relocation company a cut out of the fees they get from you. They may also give the relocation company a big discount. Appraisers, mortgage companies, moving companies and realtors all give the relocation company a cut/discount in return for the referral. That's how the relocation company makes money and finances any benefits they give to you. That's fine if the vendors are good, but sometimes quality gets sacrificed in this system for $$$.