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Old 11-12-2013, 05:37 PM
cpw cpw started this thread
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We sold our home this summer and are in temp housing while we build. We close on our new home in about 90 days. How do we shop for a mortgage? Tips? How do we find the best rate? Our builder has a 3k incentive for using their lender. Is ths a bad idea? How dowe compare closing costs, etc. among the lenders? We have excellent credit. Zero debt and plan on 20% down, conventional loan. Thanks for any advice!
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Old 11-12-2013, 05:53 PM
Location: Plano, Texas
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Typically the builder will give you the incentive, but then give you a not so great deal on the loan to make that money back. I would definitely recommend find out exactly what the builder will offer. what rate and what closing costs, then ask some of your friends and family who they have used for a mortgage and call that person.

When comparing costs, there are basically 3 sections. Lender fees, now called origination, title fees and govt recording fees. No matter who you work with the title fees and govt recording fees should be the same. so just compare the origination charges. Oh, another trick I have seen builders do is they require you to use a title company that they are affiliated with. And that title company charges extremely high fees. In Texas, typically the seller picks the title company, so find out what those fees are, then call a title company near you and ask what they will charge to perform the closing. If the title company you call is less, then tell the builder you want to pick that title company to do the closing.
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Old 11-13-2013, 05:45 AM
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First, don't shop (and lock) until you are 6 weeks out from closing (45 days). It gets pretty expensive if your lock expires and you don't close......so having a 2 week buffer will help in the event of bad weather or other unforeseen delays. When you do shop, make sure the quotes are all obtained within 2 hours of each other, on the same day. Otherwise, you're getting quotes in a normal fluctuating market and your research is meaningless.

Figure out how much 3K is in points. ie, if your loan amount is 150K, that's 2 points, or 300K, it's 1 point. Once you have this info and then you get your quotes, you can see if the builder's lender is increasing your price to offset the 3K. (I have been a preferred builder lender for quite a while and some banks have the loan officer bump the price, while others take it off their profit. If you are lucky, it's the latter and there's true value for you, the buyer). Typically the preferred lender is due to VA/FHA/USDA paperwork that is a royal pain to get each lender to complete for the builder. They (outside lenders) also do not know how to time the appraisals (again, primarily on FHA/VA/USDA loans).

Your shopping, otherwise, should be fairly simple. Compare rate/points/origination/other lender fees (tax service, UW, and so on). The tax stamps, recording, and escrows and prepaids will be the same pretty much anywhere you go.

It's too soon to say much about the federal deadline - way out there.......and your loan will be ahead of some of the changes coming out on January 14th (new loan apps after this date). But don't take your eyes off the ball during the Holidays. The biggest report, the monthly unemployment figures are typically issued the first Friday of each month (where there is a full week). This will drive rates in one direction or the other, as will the minutes from the Fed meetings. Keep your eye on the 10 year Treasury and that will give you and indication if the market's moving up or down, or, you can always post or DM here for market indicators. Overall though, you will be in record low rates......maybe not the lowest of the low, but pretty darn low. Bloomberg has a pretty decent economic calendar that can alert you to news to drive rates (and stocks): Economic Calendar - Bloomberg Hint: look for the red and gold stars
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