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Thank you for this Damba... I think I came across this one as well. With this one, it seems like you need to know how long you plan on staying in your home vs using the math provided by 'loanchic' and 'just_because' which will tell you at what point (how many months or years) that one loan makes sense, i.e. cheaper over the other.
'loanchic' & 'just_because' - thank you for providing the math on this. I created a spread sheet for to enter the numbers based on 'loanchic' math, however, I don't quite understand 'just_because' update. Here are my numbers:
Example, using a $88k loan amount (on 30 year loan):
Lender A rate: 5.25% = $486
Lender B rate: 5.75% = $506
Difference is $20 month in payment
Lender A fee: $3400
Lender B fee: $0
Difference is $3400
$3400/20 = 170
113.33/12 = 14.17
Last edited by gil_happy; 03-05-2018 at 02:41 PM..
Reason: Incorrect numbers
Those fees seem quite excessive for an $88k loan. Are those just lender fees, or do they include third party fees (appraisal, title, tax stamps, etc.)? Do the fees include an origination AND discount point(s)? If it includes discount points, you are buying down your rate.
Those fees seem quite excessive for an $88k loan. Are those just lender fees, or do they include third party fees (appraisal, title, tax stamps, etc.)? Do the fees include an origination AND discount point(s)? If it includes discount points, you are buying down your rate.
Let me try to answer this... Both lender A and B have a $600 dollar appraisal fee (since it is an investment loan), so I did not include that since it is a wash. Lender B said they have no lender fees so I have set their value to $0. Lender A indicated the $3400 fee is for title, recorder, tax service, transfer tax, etc. I guess these are not 'lender' fees, so I need to go back to lender B to ask about these items so that I'm calculating apples to apples.
You will still have third party fees, which are what they are no matter what lender you choose. The thing to compare between lenders is anything in section A of the loan estimate. If you don't have an official LE and are only being given a worksheet, look for things like origination fee, underwriting fee, processing fee, and discount fee. Those items should be listed in the first section of the worksheet.
You will still have third party fees, which are what they are no matter what lender you choose. The thing to compare between lenders is anything in section A of the loan estimate. If you don't have an official LE and are only being given a worksheet, look for things like origination fee, underwriting fee, processing fee, and discount fee. Those items should be listed in the first section of the worksheet.
Thank you.... I haven't asked for a LE since I am just in the early stages, but I'll watch for that.
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