Best Mortgage? (PMI, loan, interest rate, premium)
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My dh and I just made an offer on a house and although I've been scoping out mortgages for quite sometime I was wondering to know if anyone knows of a better deal than this one.
We're hoping to get the house for 340,000 and we have 45,000 to spend towards a down payment, points and closing fees. Income is good and credit is excellent.
As far as I've been able to tell so far B of A has the best deal. With the no fee, no closing costs no PMI, I think we'll get the best rate. With 1 point we'll be able to get something around 6.25 and will be able to buy down our rate to 5.75 by paying an additional 6,000. We plan on being in the house for the next 10 yrs or so, so prepaid interest makes sense. I've worked the Smart Money points or no points calculator.
Can anyone recommend any other banks worth checking into that they've had luck with? We're in NC so some have recommended the NC State Credit Union, we're members, or I've also heard others mention Pentagon Federal. Their 5/5 loan looks interesting.
Thanks for any help! I'm sure questions similar to this one have been asked before. I've looked through the threads but wasn't able to see another similar question. If I'm totally redundant please just direct me to the right thread.
My dh and I just made an offer on a house and although I've been scoping out mortgages for quite sometime I was wondering to know if anyone knows of a better deal than this one.
We're hoping to get the house for 340,000 and we have 45,000 to spend towards a down payment, points and closing fees. Income is good and credit is excellent.
As far as I've been able to tell so far B of A has the best deal. With the no fee, no closing costs no PMI, I think we'll get the best rate. With 1 point we'll be able to get something around 6.25 and will be able to buy down our rate to 5.75 by paying an additional 6,000. We plan on being in the house for the next 10 yrs or so, so prepaid interest makes sense. I've worked the Smart Money points or no points calculator.
Can anyone recommend any other banks worth checking into that they've had luck with? We're in NC so some have recommended the NC State Credit Union, we're members, or I've also heard others mention Pentagon Federal. Their 5/5 loan looks interesting.
Thanks for any help! I'm sure questions similar to this one have been asked before. I've looked through the threads but wasn't able to see another similar question. If I'm totally redundant please just direct me to the right thread.
Thanks!!
We were going to go with B of A until we started getting the run around with them re: a more concrete GFE. They would not give us any info regarding points until they had the purchase agreement. No fed, state, or interest were put on the GFE. I never talked to the same person. Very dissatisfied. Went to a family member who is a mortgage broker & had her look at B of A GFE. She said that they were not completely disclosing all the information they should. NOthing illegal, but still not the best business practice.
Called around to other mortgage companies. Told them all about B of A's no fee mortgage. They all sent me GFEs based on the same info we gave B of A. All 3 told me that when points were added, fed & state taxes, & interest...the closing costs would still be there. B of A not giving anything away for free.
We finally went with Wells Fargo that was willing to compete with B of A. Charged us no points (or origination fee; same thing) no app fee. I have always spoken to the same person. Rate is floating just as it is with B of A.
Both our credit scores are in the low 800s & income is good. Decent downpayment.
This process took me about 3 weeks & tons of phone calls.
Very dissapointed w/ B of A. Even when I called them to tell them about Wells, they said there was little they could do until they had a purchase agreement.
Everyone knows a GFE is just that; but B of A was blatantly unwilling to give me any estimate of what closing costs would be & kept reiterating their commercial. It's not the truth. You are going to have to pay closing costs but they will be in terms of points & higher interest rate.
There is PMI with B of A unless you have 20% down. They will instead have it Lender Paid PMI & it will reflect in your interest rate. This info I received after our relative gave us a direct phone number to a mortgage lender at B of A after the fiasco & spoke to a B of A rep.
origination fees and discount points are not the same thing.
one is prepaid interest...the other isnt.....
I'm in NC...and my advice is NOT to pay any discount points. Rates are going to go down...even it it's 3yrs from now...if the rates go down to 5.5% you would have wasted 6k.
If you wait a few years to refinance.....you will save a lot of money.
If have visited banks...and still not happy...I would contact a broker
With a loan size of 305k...30yr fixed...720+ credit score.....1 origination fee...you should get 6.125%. (NO PMI)
If you paid an extra 4200 you will get 5.75%(i dont recommend this)
Quote:
Originally Posted by omamia
My dh and I just made an offer on a house and although I've been scoping out mortgages for quite sometime I was wondering to know if anyone knows of a better deal than this one.
We're hoping to get the house for 340,000 and we have 45,000 to spend towards a down payment, points and closing fees. Income is good and credit is excellent.
As far as I've been able to tell so far B of A has the best deal. With the no fee, no closing costs no PMI, I think we'll get the best rate. With 1 point we'll be able to get something around 6.25 and will be able to buy down our rate to 5.75 by paying an additional 6,000. We plan on being in the house for the next 10 yrs or so, so prepaid interest makes sense. I've worked the Smart Money points or no points calculator.
Can anyone recommend any other banks worth checking into that they've had luck with? We're in NC so some have recommended the NC State Credit Union, we're members, or I've also heard others mention Pentagon Federal. Their 5/5 loan looks interesting.
Thanks for any help! I'm sure questions similar to this one have been asked before. I've looked through the threads but wasn't able to see another similar question. If I'm totally redundant please just direct me to the right thread.
Just curious why you believe rates will go down? I'm clearly not an expert at this. Even if we did re-fi wouldn't we have to pay closing costs all over again which would equal out to how much we're paying in points now?
Please enlighten me. I'm really unsteady about this stuff.
Maybe this is off track but I was confused about the points/orig fee and looked so I looked on the IRS website. I copied and pasted the definition
Points
The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points.
Unless I am not understanding, the IRS treats them interchangeably and they are both deductible? no?
Is the diff that points buy down a loan and orig fee does not?
discount points prepaid interest
origination fee....charge to originate your loan.
i have heard from a few accountants that the deductibility isnt the same.
Quote:
Originally Posted by CarolinaCruzes
Maybe this is off track but I was confused about the points/orig fee and looked so I looked on the IRS website. I copied and pasted the definition
Points
The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points.
Unless I am not understanding, the IRS treats them interchangeably and they are both deductible? no?
Is the diff that points buy down a loan and orig fee does not?
refinance may cost you 3-4k....and you may obtain a much lower rate.
if you pay 6k now....it will probably take 4-5yrs for you to recover it.
Rates are determined by 10yr bond rates....if the stock market is doing well then the bonds are doing bad (means high mortgage rates)
if the stock market is doing bad then everyone will invest into the bonds which will make the rates go down.
stock market crashed on 9/11 and you can see that around 2002-2003 we had the start of the refi boom. Rates were at 4.25% for 30yr fixed.
analysts have said that the market is overinflated and needs to correct itself.
Lenders make more money charging points....and I'm a broker...i'm telling you dont pay for it now.
It's a waste of money.
another thing is that in NC the home appreciation is 7-8% for the last 6-7years.
Your home might appreciate enough to refinance......you will be under the 80% LTV to avoid PMI
Just curious why you believe rates will go down? I'm clearly not an expert at this. Even if we did re-fi wouldn't we have to pay closing costs all over again which would equal out to how much we're paying in points now?
Please enlighten me. I'm really unsteady about this stuff.
Thanks banker0697, it was good to look at the numbers up close.
If they do go down, doesn't it make sense to get an ARM now and then refinance to a fixed 30 yr if they go down? Otherwise you pay the premium for locking in your rate for 30 yrs only to refinance later.
I was looking into Pentagon Federal's 5/5 arm which seems like a decent deal with 5% interest, no prepayment penalty and it only resets every 5 years. It can only go up at max 2%/ year. It seems good, is there something that I'm missing.
My Mom, who is very risk-adverse says to never get involved in an ARM. That the bank could sell on the loan to others who won't recognize the original terms of the agreement and wouldn't allow us to shop the loan to other lenders.
if it get transfered they honor the original terms...you dont have to worry about that.
i think 5/5 sounds too good to be true....look at the APR...and total closing costs
Quote:
Originally Posted by omamia
Thanks banker0697, it was good to look at the numbers up close.
If they do go down, doesn't it make sense to get an ARM now and then refinance to a fixed 30 yr if they go down? Otherwise you pay the premium for locking in your rate for 30 yrs only to refinance later.
I was looking into Pentagon Federal's 5/5 arm which seems like a decent deal with 5% interest, no prepayment penalty and it only resets every 5 years. It can only go up at max 2%/ year. It seems good, is there something that I'm missing.
My Mom, who is very risk-adverse says to never get involved in an ARM. That the bank could sell on the loan to others who won't recognize the original terms of the agreement and wouldn't allow us to shop the loan to other lenders.
Thoughts?
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