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6 hours ago, ghostguy123 said:

I called the company I have my loan through on my primary residence (pennymac) to ask about any options I might have.

I owe about 61k on my mortgage that was originally about 95k.  Rate 3.75%.   I originally did a 15 year mortgage and have paid some extra over the past 4 years, so I probably have about 8-9 years left.

He basically told me I was wasting my time because the balance was too low and just couldn't wait to get off the phone with me.

Am I wasting my time even bothering to see if I can somehow save money from here on out?

Cost of issuance and lack of amortization are hard to make up since you have very little interest left.

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3 hours ago, skycriesmary said:

 For measure, I have a loan with about 100k on it at 5.25% and it still doesn't make sense, even bringing it down to 3.5% or so. 

How much time left on that?  

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6 hours ago, skycriesmary said:

Yeah, with that low of a balance, the savings on rate aren't going to eclipse the fees involved. For measure, I have a loan with about 100k on it at 5.25% and it still doesn't make sense, even bringing it down to 3.5% or so. 

Are you sure about that? 

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7 hours ago, skycriesmary said:

Yeah, with that low of a balance, the savings on rate aren't going to eclipse the fees involved. For measure, I have a loan with about 100k on it at 5.25% and it still doesn't make sense, even bringing it down to 3.5% or so. 

Can I tell you how much money you are wasting by making poor assumptions? 

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On 10/25/2019 at 4:35 PM, OrtonToOlsen said:

 

3.15% on a refi is pretty sweet, no?

Asking for a friend who doesn't know much about mortgages

It could be... or you could be getting screwed. Rate is not the only consideration on a loan my friends. 

I am a Mortgage Broker licensed in Illinois (so I am not offering this to get your business.... well, unless you are in Illinois) but shoot over your Loan Estimate to me and I will take a look at it and point out anything to be concerned about. 

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10 hours ago, ghostguy123 said:

I called the company I have my loan through on my primary residence (pennymac) to ask about any options I might have.

I owe about 61k on my mortgage that was originally about 95k.  Rate 3.75%.   I originally did a 15 year mortgage and have paid some extra over the past 4 years, so I probably have about 8-9 years left.

He basically told me I was wasting my time because the balance was too low and just couldn't wait to get off the phone with me.

Am I wasting my time even bothering to see if I can somehow save money from here on out?

Some credit unions keep mortgages of 10 years or less on the books and underwrite them like first position home equity loans.  They often have low rates and fees.  For instance, if you lived in my state (not Ohio) I could offer you 2.99% for 10-years for $250 in closing costs. You might want to check around with credit unions.

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6 minutes ago, Juxtatarot said:

Some credit unions keep mortgages of 10 years or less on the books and underwrite them like first position home equity loans.  They often have low rates and fees.  For instance, if you lived in my state (not Ohio) I could offer you 2.99% for 10-years for $250 in closing costs. You might want to check around with credit unions.

I think I will check with the one where I work.  Worth a shot.

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Here is a few tips for you guys when it comes to mortgages. (ok, more than a few)

#1: The difference between retail and wholesale. Retail is your banks, credit unions and direct lenders (some big direct lenders would be Quicken, Guaranteed Rate, Fairway, etc). Wholesale is your mortgage broker. I shouldn't have to tell you which is going to end up giving better rates and cost on average. 

#2: The bigger the Bank the more they usually suck. UNLESS you are your typical FBG rolling in cash. If you are, then the big and regional banks that have wealth management departments will be very aggressive in offering jumbo loans. They basically use it as a loss leader. They will give you a great deal and then get you into their wealth management where they make all their money off of you. When it comes to mortgages, a jumbo is pretty much the only time you want to talk to a bank. Otherwise, avoid banks though sometimes your smaller banks will have a pretty good deal.  

#3: If you see them advertising on TV, I promise you, they suck. Quicken spends ridiculous amounts of money on advertising. Why? Because the people who don't know better who have done loans with them before and almost always got bent over are paying for this marketing machine. Plus, they are pretty much the slimiest lender out there. Over and over and over again hearing clients tell me "they said X to me" and in reality it is "Y". They also typically will start off with what seems like a great rate and then charge 3 points in origination charges. DO NOT go to Quicken (aka Rocket Mortgage) or one of the slim ball VA lenders like Veterans United or New Day. 

#4: I love credit unions. Huge fan of them. I belong to two of them. CU's are usually your best bet for checking, savings, car loans, personal loans, equity loans or lines, etc. However, one area that they are not usually your best bet is mortgages. The reason is mostly about scale. There are some large CU's but most are still relatively small. They do not do enough volume to be efficient and the large loan amounts take a big chunk of their reserves. Go ahead and check with your CU, they can offer some good deals, I have seen it and they will still tend to beat banks and direct lenders but not usually the best bet. 

#5: Rate is not the end all be all of doing a loan. You have the rate which of course is important but there are also fees and origination charges. A typical game that is played is showing a great rate but then when you compare to another lender you see that you are really PAYING for that great rate. Often times as a broker, I am able to match the rate and give a credit versus the origination points they are charging. Be mindful of that. 

#6: Use the Loan Estimate! Wherever you go, when you get the Loan Estimate, shop it to other lenders. You can just send it to the lender and let them come back with their offer or you can put more work in it and just shop and compare rates. What happens if you do? Worst case, you get the peace of mind that you are getting a good deal. Best case, you save yourself thousands of dollars!

#7: Your current lender is not going to make it easier than going to another lender. They will need to get all new docs or if it a streamline another lender can do a streamline as well. 

#8: Unless you hate yourself and want to throw your phone away forever do not go to a website that 'shops' loans. First of all, they don't really. All they are doing is selling the leads to lenders. Second, you will get bombarded by phone calls and wish you never even heard of Lending Tree or whatever else. 

#9: Always shop lenders. Mortgage brokers do the shopping for you accessing multiple lenders and getting wholesale pricing. 

#10: Don't make assumptions about what you can or can not do with a refinance. Talk to someone who actually knows. They can go over your options after figuring out your situation and your goals. I have seen some bad thinking in here that is costing people significant money. 

#11: The better your credit score the better your rate. You are going to top out around the 740-750 area. So, don't worry about getting an 800 credit score. 

#12: If you have more debt other than the mortgage/equity loan or line then you might be better off refinancing all the debt into the home. 

#13: DO NOT listen to Dave Ramsey when it comes to mortgages. He is a dolt when it comes to mortgages, gives horrible advice and then sends his followers to Churchill mortgage because he gets paid advertising from them. It disgusts me. People trust him and he sends them to a crappy retail lender because he gets a big check from them on top of giving really HORRIBLE advice that ends up costing people tons. Just ignore him when it comes to mortgage advice. 

#14: If you are getting a mortgage, don't do anything stupid like deposit a bunch of cash into your account or buy a new car or change jobs. Anything to do with your job, credit and income can cause problems for the loan. Yes, I don't care if you are doing the same job for more money- I can't close your loan on time now. (real life situation, I was able to save the loan but this ding dong couldn't get through his head that most lenders would have killed the deal and it was all our fault somehow that we couldn't close on time). 

#15: Realize that the vast majority of down payment assistance programs are pushed by lenders who do them and realtors who want you to buy a home with them as free money is NOT. Why do they pitch it like that? Well, why wouldn't you use a lender or realtor who is offering you free money?! This is the way that most of them work... they are set up to give money in a form of a forgivable loan or silent second or another such form. You must keep the loan for an extended period of time 5-7 years is most common. Once you do (meaning you can not sell or refinance that loan) then you are free! Here is the thing... that 3-3.5% of the purchase price that they gave you jacked up your rate. I have calculated the differences- not from different lenders but from lenders that I know using a program, the rate you would get with them without the DPA and the rate you get with it... and let's say you got $10K from them... that $10K ends up costing you $30-40K over the period that you did PLUS potentially an opportunity cost of refinancing as I have done for all my clients who listened to me last year and now that rates have dropped are realizing large savings. There are true grants out there (where there is no ties to the money) but most of these also have a higher rate. I have access to some of these programs but only have done one in the last few years and that was after being sure to explain everything in detail and the real cost to the client (side not, the plan was to refi them later which we plan on doing in a couple of months). 

#16: If you are veteran, first responder, medical profession- the great sounding program (Homes for Heroes is the largest one) where you get money back isn't as great as it sounds. I promise you. The realtor part of it is actually a good deal for you but the lender side where they typically pay for your appraisal (around $400-600) is likely costing you a ton of money in the rate and cost of the loan. These are usually retail lenders who have lot's of extra cash (there is a reason why they have to charge higher rates and fees/origination) that pay into these programs, which are relatively expensive (for a lender about $1800 a year for Homes for Heroes just to be part of their program and that is it). You can still shop the lender. DO SO!

#17: First time home buyer programs are usually marketing schemes. There are some benefits offered if you are doing a conventional loan which anyone can have access to. Other things are usually the DPA programs (see #15)  and should be avoided. Your third cousins best friend's dog's breeders brother who got $10K free money to buy a home is more times than not money that cost them. 

#18: Most loans over 80% loan to value that doesn't have mortgage insurance is costing you in a higher rate. If you are doing conventional loan, you can get rid of the MI later. If it is baked into the rate it is there for life of the loan. 

#19: FOR THE LOVE OF GOD AND ALL THAT IS HOLY if you are building a home PLEASE understand that the builders preferred lender that they are going to give you $10K in free upgrades for using them is going to cost you much more money than the $10K they are 'giving' you. Here is how this scheme works. The free upgrades actually are going to cost them maybe $2K if that to do. In return for you using their preferred lender and getting absolutely bent over they are going to get a nice big fat check worth alot more money. The builder and the lender will laugh at you sitting in the model house counting your money you just forked over as they watch you move in. 

#20: A realtors 'preferred lender' can be good or can be bad. There is no way to tell. Here is how it works in the industry. Retail lenders who tend to charge more have bigger budgets to spend on marketing. They will 'partner' with realtors and pay for the realtors marketing (also sponsor things like their meetings, or holiday party, or conferences or whatever else) and in return the realtor makes them their 'preferred lender' so the realtor will refer you to them when you are not already using a lender. Now, you can also have 'preferred lenders' that don't do that stuff and the realtor has found them to be a good lender. (side note here, in the average realtors eyes, a good realtor is one that closes deals and does it on time and not so much about rate and cost) For example, I am several realtors 'preferred lender' but do not spend money on them and it is really based on them knowing I can get more loans approved, close on time and give their clients great deals. Overall, NEVER get loan advice from a realtor unless they are the rare ones that are licensed for lending and actually know what they are talking about (that is significantly less than 1% of them)

#21: You don't need 20% down. Don't keep waiting to buy when you are spending money away on rent. Every month you pay someone else's mortgage (paying rent) is money you will never see a dime of again. As an owner you are building wealth. Think of it this way... landlords are landlords for a reason. They are not losing money and on top of it are gaining equity. For most Americans, their 'wealth' is almost exclusively in their homes. Not retirement accounts or stocks etc but built up equity from paying down principle and appreciation of their homes which is historically pretty consistently 5% over periods of time (including booms and crashes). 

#22: You don't need perfect credit to get a mortgage. You can do a FHA loan with a minimum credit score of 580 with as little as 3.5% down of the purchase price. 

#23: When picking a good realtor find out these things about them: A) Do they do this as a full time job or is it a side gig or something they do when they are bored etc. You want a full time realtor for the experience and focus. Trust me. The exception on this would be a semi-retired realtor but honestly, they are usually ones to pass on as well. You want someone who knows the market, is sharp on negotiation and has good contacts. B) How long have they been doing the job. Experience counts for sure. But I rather go with a rookie doing it full time than someone been doing it 10 years as a part time gig. C) What is their availability. You want someone that will be available on your time tables and not theirs. D) How many houses have they sold or closed on? It will give you an idea about how productive they are. But keep in mind, someone who isn't as productive might be hungrier and more flexible to you versus someone who is doing tons of volume. 

#24: Always get an inspection done from a good inspector. Do not skimp here. A good inspector will give you very important info on the home even if there is nothing to be concerned over and potentially catch a very big problem. Keep in mind even the best inspectors will not be able to find out anything and everything wrong with a house. Find out of they do mold and radon testing or not and if it is extra if they do. I would go ahead and do it. Keep this in mind, this is usually the largest financial transaction of your life so far. Do you want to be penny wise and dollar foolish on it?

#25: If you are military or a vet. Run away from supposedly veterans lenders like Veterans United and New Day (and more but those are two big ones) THEY SUCK. Even good places like USDAA (who does insurance well), Navy Fed, may do a lot of good for vets in other areas but are not the best in mortgages. 

#26: As I will get to soon... brokers are better. This is true for insurance too. I see insurance quotes often and I personally did my own shopping where I shopped 10 carriers plus one insurance broker. The broker easily won out. Plus, the big carriers suck if you end up with a claim. I have a whole personal story about Allstate sucking big hairy monkey balls. On top of it all an agent at a large carrier has NO sway on anything on a claim. A broker actually does (as counter intuitive as that seems) because they can tell the insurer that if they don't do something right that he will not send that insurance company any more business. The captive agent has no choice. 

#27: If you are in a rural area, check out a USDA loan. You can finance up to 100% but keep in mind, you actually might end up better served doing a FHA loan depending on specifics. 

#28: Brokers are better. They weren't always... they use to be a pack of scumbags and slimballs who would screw over their own mothers for an extra 20 spot. Before 2008 I had plenty of chances to be a broker and would not even though I would have made 3 or 4 times more than I was making because again the vast majority were nastier than moldy dog poo with worms in it. That being said, even back then you could get a better deal from a broker IF you knew what you were doing and could protect yourself. Otherwise, you could get screwed so badly that it would make going to Quicken seem like a good deal. In fact, I actually used a broker on both of my home purchases even though at both times my wife and I worked at banks. That is right, when bankers want to do their loans- you know who they come to? Brokers. Things have changed and really the consumer advocates are now brokers and the things they use to do before that would screw people over are things that can not be done now. Not only are you going to get a better deal at a broker the vast majority of the time but you are also not going to get screwed over. Plus they have options that banks, credit unions and direct lenders don't have to get you approved if you have a harder to finance situation like a business owner, bad credit, recent major credit event (foreclosure, bankruptcy, etc) etc. Also, brokers can close quicker than other lenders on average. How do you find a broker? Well, you can ask me, I know brokers throughout the country. I have no problem connecting you to one (and if you are wondering, by regulation and the risk of losing my license, I can not get paid for referring you to a broker... it is purely out of help you out) or if you want you can check out www.findamortgagebroker.com oh... and if you are in Illinois, I can help you directly. 

Hope this helps guys. 

Best of luck. 

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2 hours ago, Chadstroma said:

Can I tell you how much money you are wasting by making poor assumptions? 

This assumption is based on the fact I will be paying this off within the next 2-4 years. The closing costs and what not don't make up for the spread. I've already discussed rolling this in with the broker who was doing my other loan refi at 3.5%. 

Hard to say poor assumptions when you don't know all the circumstances.

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11 minutes ago, skycriesmary said:

This assumption is based on the fact I will be paying this off within the next 2-4 years. The closing costs and what not don't make up for the spread. I've already discussed rolling this in with the broker who was doing my other loan refi at 3.5%. 

Hard to say poor assumptions when you don't know all the circumstances.

No, not hard. At 5.25% rate, you are leaving money on the table even at 2 years. But that is up to you. 

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13 hours ago, Chadstroma said:

No, not hard. At 5.25% rate, you are leaving money on the table even at 2 years. But that is up to you. 

I think the main reason I couldn't roll it up into the refi at 3.5% was debt to income levels, IRRC. I haven't looked into shorter term loans, honestly.

Edit: It was because it's on a rental property, a 2nd loan on the property, and the loan to value ration didn't work. Also, as awesome as the lender I work with has been, they have a 150k minimum loan amount.

Edited by skycriesmary

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14 hours ago, skycriesmary said:

I think the main reason I couldn't roll it up into the refi at 3.5% was debt to income levels, IRRC. I haven't looked into shorter term loans, honestly.

Edit: It was because it's on a rental property, a 2nd loan on the property, and the loan to value ration didn't work. Also, as awesome as the lender I work with has been, they have a 150k minimum loan amount.

Not doing it because you think it doesn't make sense is a whole different story from doing it because you can't. 

That being said, this is your primary residence right (balance of $100K property)? You have equity in the primary property, how much? What are the rates on the rental? How much is owed on the rental? Do you have other debt, credit card, car, etc? How long have you rented the rental out- 2 years? 

As for the min loan amount. The lender you have worked with isn't the only lender out there. Also, another thing I didn't mention up in my manifesto above... brokers have access to lenders with very little or no overlays (essentially an overlay is a rule for that particular lender on top of the minimum rules for conventional or govies). So, that can very well mean higher debt to income ratios than what your current lender is able to work with. 

What state are you in? I bet you there is something there that can really make a difference in your financial and real life from the smell of it. Of course, the devil is in the details. But I can connect you to a good broker in your state. 

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13 minutes ago, Chadstroma said:

Not doing it because you think it doesn't make sense is a whole different story from doing it because you can't. 

That being said, this is your primary residence right (balance of $100K property)? You have equity in the primary property, how much? What are the rates on the rental? How much is owed on the rental? Do you have other debt, credit card, car, etc? How long have you rented the rental out- 2 years? 

As for the min loan amount. The lender you have worked with isn't the only lender out there. Also, another thing I didn't mention up in my manifesto above... brokers have access to lenders with very little or no overlays (essentially an overlay is a rule for that particular lender on top of the minimum rules for conventional or govies). So, that can very well mean higher debt to income ratios than what your current lender is able to work with. 

What state are you in? I bet you there is something there that can really make a difference in your financial and real life from the smell of it. Of course, the devil is in the details. But I can connect you to a good broker in your state. 

This loan is on my rental, not my primary residence. Two loans on property, one that has about 375k balance at 3.5%, and another that has about 100k at 5.25%. Rental income per month is $3,200. Only other debt is about 23k on car. May of next year will be 2 years renting these out. 

I'm in Oregon. Thanks for the input, Chad.

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1 hour ago, skycriesmary said:

This loan is on my rental, not my primary residence. Two loans on property, one that has about 375k balance at 3.5%, and another that has about 100k at 5.25%. Rental income per month is $3,200. Only other debt is about 23k on car. May of next year will be 2 years renting these out. 

I'm in Oregon. Thanks for the input, Chad.

Ok, so this is a rental which has a 1st lien of $375K at 3.5% and a 2nd lien of $100K at 5.25%? If I am understanding that correctly, then yes, you are good staying put. Being a NOO (Non-Owner Occupied) you have a great rate on the 1st (did you own the property and then moved out and rented it?). For NOO you would not get down into the 3's in a refi.  

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8 minutes ago, Chadstroma said:

Ok, so this is a rental which has a 1st lien of $375K at 3.5% and a 2nd lien of $100K at 5.25%? If I am understanding that correctly, then yes, you are good staying put. Being a NOO (Non-Owner Occupied) you have a great rate on the 1st (did you own the property and then moved out and rented it?). For NOO you would not get down into the 3's in a refi.  

Sorry for needing to clarify more, the 375k loan is actually a refi on my primary residence (but the funds were used to purchase the rental), the 100k loan was for the rental (Down Payment).

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19 hours ago, Chadstroma said:

#25: If you are military or a vet. Run away from supposedly veterans lenders like Veterans United and New Day (and more but those are two big ones) THEY SUCK. Even good places like USDAA (who does insurance well), Navy Fed, may do a lot of good for vets in other areas but are not the best in mortgages. 

What about mortgages does USAA not do well in your experience?

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1 hour ago, Ron Swanson said:

What about mortgages does USAA not do well in your experience?

So, as you realized, I meant USAA when I typed USDAA. First, I have heard great thing about their insurance more about their service and claims process not as much about their pricing but overall good marks on insurance for them. I still prefer going to an Insurance Broker but to be fair, I did not shop USAA when I did my own insurance shopping. I don't get too excited about the insurance quotes I see one way or the other because it is very hard to compare apples to apples on those as I don't know all that is being covered or not covered and at what levels. 

For their mortgages, the big issue is I (and other brokers around the country whom we compare notes on VA lenders as a way to try to protect vets) have seen higher rates and costs than what your average broker is going to be able to do.  They are not HORRIBLE like Veterans United and New Day but they are not going to be the best either and the margin from a broker is pretty big to add up to real money. 

I seem to remember that they sell the servicing of their loans too but I am not 100% sure on that. They has been a rumor that they will be shutting down their mortgage division which actually in this rate environment would be absolutely shocking. Pretty much everyone and their mothers dog is getting into the mortgage game right now because there is easy money in refi's and there are something like 30 million households out there right now that could benefit from a refi. That is a lot of business to be had... anyways... bunny trail.... rate and cost is a bit higher with USAA.

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3 hours ago, skycriesmary said:

Sorry for needing to clarify more, the 375k loan is actually a refi on my primary residence (but the funds were used to purchase the rental), the 100k loan was for the rental (Down Payment).

Ok, so.... we are talking about your primary residence with a 1st of $375K and a 2nd of $100K?

If I am not still confused and that is the case, then I don't see a need to refi still in a mortgage. You could look to refi the 2nd. I would check with local credit unions. They tend to be the best with rates for equity loans. The CU I have my equity loan at right now is offering a 5 yr at 4.74% at 85% LTV.  If you are aggressively paying that down and expect to have it paid off in a couple of years, then you could go to a HELOC and get prime + 0 and maybe even a low intro rate too. Prime being 4.75% currently. And you should be able to do either with no cost. 

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#29: Zillow SUCKS. Don't even bother with it. (same with Zulia and Redfin) They are nothing more than a lead generation platform for realtors and lenders. The two things that they are suppose to do, they can't do half way decently. a) Their Zestimates are poo. Absolutely worthless. They do more harm than good in you trying to get an idea of the value of your home. b) Their listings are just as much poo. They do not have access to MLS directly (MLS is where all the realtors get the listings) so they have to go to third parties to get listings. It is not uncommon for properties to be listed for sale their and have been sold months previously. Or by the time a listing shows up there, it can already be under contract. On top of that there are a good amount of errors on the info of the properties. Just avoid. If you want to go to an online site, use realtor.com or homesnap.com both of these have direct access to MLS and are updated like every 5 minutes or so. 

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2 hours ago, Chadstroma said:

#29: Zillow SUCKS. Don't even bother with it. (same with Zulia and Redfin) They are nothing more than a lead generation platform for realtors and lenders. The two things that they are suppose to do, they can't do half way decently. a) Their Zestimates are poo. Absolutely worthless. They do more harm than good in you trying to get an idea of the value of your home. b) Their listings are just as much poo. They do not have access to MLS directly (MLS is where all the realtors get the listings) so they have to go to third parties to get listings. It is not uncommon for properties to be listed for sale their and have been sold months previously. Or by the time a listing shows up there, it can already be under contract. On top of that there are a good amount of errors on the info of the properties. Just avoid. If you want to go to an online site, use realtor.com or homesnap.com both of these have direct access to MLS and are updated like every 5 minutes or so. 

Zillow is good in Texas for price history.  You can get a good sense of what the house listed and sold for in prior 20 years or more which helps alot. 

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39 minutes ago, culdeus said:

Zillow is good in Texas for price history.  You can get a good sense of what the house listed and sold for in prior 20 years or more which helps alot. 

Nothing special. Can get the same info from realtor.com (I think homesnap too). 

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57 minutes ago, culdeus said:

Zillow is good in Texas for price history.  You can get a good sense of what the house listed and sold for in prior 20 years or more which helps alot. 

how does it help when you don't know the condition of the home?

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7 hours ago, Getzlaf15 said:

how does it help when you don't know the condition of the home?

You can track it above lot value this way.  If you comprehend what bare dirt was going for in certain timeframe.  

 

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7 hours ago, Chadstroma said:

Nothing special. Can get the same info from realtor.com (I think homesnap too). 

Ok. I'll take a look at those also. 

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On 11/24/2019 at 10:36 PM, Chadstroma said:

 

Curious if you or others have any input on the following. I emailed but the people are out of the office. My principal on my old loan was one amount, I paid December already, and on my new loan the principal is $2400 more than the previous principal. Unless there is more detail I need to provide, what answer can I expect from the loan people?

I was told my payment would go down and my principal would stay the same yet I see this difference. Any ideas? Any resolutions to plan for?

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On 11/29/2019 at 1:19 PM, Mario Kart said:

Curious if you or others have any input on the following. I emailed but the people are out of the office. My principal on my old loan was one amount, I paid December already, and on my new loan the principal is $2400 more than the previous principal. Unless there is more detail I need to provide, what answer can I expect from the loan people?

I was told my payment would go down and my principal would stay the same yet I see this difference. Any ideas? Any resolutions to plan for?

It sounds like you are looking at the split of principle and interest on your payment with the amortization. As you pay you mortgage month to month, your amortization will shift from most of the payment covering interest and as your principal amount makes progress in paying down your loan, then more and more of your payment goes towards paying the principle amount versus the interest. If you make a principal only payment, that will speed up the amortization with more and more of your payment making progress against the principal amount. It sounds like you have it backwards, your payment will remain the same, always, but your loan amount will reduced. The amount paid on principal will increase month to month and the interest amount will decrease. 

You can see an amortization schedule with any one of the numerous calculators out there like this one: https://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx

Unless I am misunderstanding what you are saying or asking. 

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On 11/25/2019 at 7:33 PM, Chadstroma said:

So, as you realized, I meant USAA when I typed USDAA. First, I have heard great thing about their insurance more about their service and claims process not as much about their pricing but overall good marks on insurance for them. I still prefer going to an Insurance Broker but to be fair, I did not shop USAA when I did my own insurance shopping. I don't get too excited about the insurance quotes I see one way or the other because it is very hard to compare apples to apples on those as I don't know all that is being covered or not covered and at what levels. 

For their mortgages, the big issue is I (and other brokers around the country whom we compare notes on VA lenders as a way to try to protect vets) have seen higher rates and costs than what your average broker is going to be able to do.  They are not HORRIBLE like Veterans United and New Day but they are not going to be the best either and the margin from a broker is pretty big to add up to real money. 

I seem to remember that they sell the servicing of their loans too but I am not 100% sure on that. They has been a rumor that they will be shutting down their mortgage division which actually in this rate environment would be absolutely shocking. Pretty much everyone and their mothers dog is getting into the mortgage game right now because there is easy money in refi's and there are something like 30 million households out there right now that could benefit from a refi. That is a lot of business to be had... anyways... bunny trail.... rate and cost is a bit higher with USAA.

When we looked for a mortgage, USAA was half a percent higher than others. 

And their yield on savings is abysmal. 

If it wasn't for their customer service, I don't think they'd survive.  We have insurance through them because as a bundle their price is better than others we've seen, but not by so much that I'd have to stay with them if I could find one place for mortgage, savings and insurance. But we've been with them over 20 years, and it's just easier to keep them as our primary account. 

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2 hours ago, -OZ- said:

When we looked for a mortgage, USAA was half a percent higher than others

And their yield on savings is abysmal. 

If it wasn't for their customer service, I don't think they'd survive.  We have insurance through them because as a bundle their price is better than others we've seen, but not by so much that I'd have to stay with them if I could find one place for mortgage, savings and insurance. But we've been with them over 20 years, and it's just easier to keep them as our primary account. 

When I went to PNC (my bank) to get a wire transfer to pay off my 2nd, the lady told me about their refinance plan.   The one neat thing is that you could choose any number of years but just like for you, the rate for the number years I was going to do with lenderfi was half a percent higher.   I was a little relieved b/c I was afraid they'd come in lower and then I'd have to go through the process of trying to get out of what I had going on with lenderfi.  I have no idea why anyone would go with someone with such a higher rate.

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6 hours ago, -OZ- said:

When we looked for a mortgage, USAA was half a percent higher than others. 

And their yield on savings is abysmal. 

If it wasn't for their customer service, I don't think they'd survive.  We have insurance through them because as a bundle their price is better than others we've seen, but not by so much that I'd have to stay with them if I could find one place for mortgage, savings and insurance. But we've been with them over 20 years, and it's just easier to keep them as our primary account. 

There is really no benefit in mortgage,  savings and insurance all at one spot. I mean, not even convenience. You will never call one number and take care of all three. You would get transferred around for one product or another.

Their service and reputation is really what USAA thrives off of. I bet if you contacted an independent insurance broker you could find some large savings. I think I mentioned it in the first write up that they were one of the few insurance places I did not personally shop but to beat out guys like Allstate or State Farm isn't all that much of a hard thing to do.  

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3 hours ago, NutterButter said:

When I went to PNC (my bank) to get a wire transfer to pay off my 2nd, the lady told me about their refinance plan.   The one neat thing is that you could choose any number of years but just like for you, the rate for the number years I was going to do with lenderfi was half a percent higher.   I was a little relieved b/c I was afraid they'd come in lower and then I'd have to go through the process of trying to get out of what I had going on with lenderfi.  I have no idea why anyone would go with someone with such a higher rate.

A pick your term is not an uncommon product offering. 

As for getting a higher rate. It really comes down to ignorance. Not ignorance in the derogatory sense but just the "don't know better" sense, which is why I wrote out that manifesto above. Quicken is the largest mortgage lender in the nation right now. They are HORRIBLE. They routinely screw people over on a daily basis with higher rate and/or charging needless origination points and fees. How do they get away with it? Well, they are an amazing marketing company. They really are. In fact, I describe the company in two ways. First: They are a great marketing company that happens to do mortgages badly. Second: Lies, more lies and marketing. That is Quicken. 

People tend to choose their mortgages through poor routes: Commercials that they see (Quicken, Veterans United, New Day.... companies spending heavily on commercials because they screw over their consumers for the profit), Friends or family members who recommend someone (random but almost always their friend or family member don't know much more than they do and just had a pleasant experience with a lender), a realtor recommending their 'preferred lender' (random and very often is just the lender that hands over the biggest check for 'co-marketing' and that is usually retail which spends heavily in this because it is the only way they can compete), a builder saying to use their 'preferred lender' for special free upgrades (random but the worst of the worst when it comes to screwing people over, the builder is getting a kickback and the loan is costly), and going to their bank (random but usually the big banks Citi, BofA, Chase, Wells, US Bank, PNC, etc where the retail set up us usually going to work against you unless you are doing a jumbo where you can get a good deal if you get roped into their wealth management depts).

I had a client not too long ago that I helped get their credit ready to buy. When they went they had a family member tell them to use a particular company. The client ghosted me. Would not even give me the chance to compare. I know the company she went to and I have routinely beat them easily with a large margin. This client not only didn't have the decency to let me compete after helping her over a long period of time but listened so blindly to a family member that it has cost her thousands of dollars for no reason. (karma I guess) But when it comes down to it... people just do not know. 

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2 hours ago, Rattle and Hum said:

@Chadstroma thx for the info. Any idea what commission to list a home is if going through HomesForHeroes? Typical in our area is 6%. 

This is a better question to ask a realtor as this falls outside of my expertise. However, 6% is pretty much the high end these days and what was considered 'industry normal' not too long ago. You can get a listing agent to go lower though for sure. I don't know how much you get back from the commission though in that program, so it may even out. I would call a few local realty shops in the area and tell them what you got and what they would do for listing. Let them fight over it. 

I am not familiar with the sell side of Homes for Heroes, I can say on the buyer side the deal isn't bad at all for the consumer for the realtor part of it. For the lender part, chances are high that you will end up spending much more than the $500 you 'get' back from them in higher rates and costs- but not always. I would shop the lender and figure out if that is worth it or not. 

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13 hours ago, Chadstroma said:

Rates took a dive today. FYI

So what happens if someone is in the middle of a refi process when rates go down? Can the borrower take advantage of a rate change in their favor or are they generally locked in at the rate when they signed the initial paperwork? Asking for a friend.

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3 hours ago, soothsayer said:

So what happens if someone is in the middle of a refi process when rates go down? Can the borrower take advantage of a rate change in their favor or are they generally locked in at the rate when they signed the initial paperwork? Asking for a friend.

They will make money when they sell the loan. (the bank)

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4 hours ago, soothsayer said:

So what happens if someone is in the middle of a refi process when rates go down? Can the borrower take advantage of a rate change in their favor or are they generally locked in at the rate when they signed the initial paperwork? Asking for a friend.

That's a fantastic question that a friend has as well.   I believe our friends can back out but they're on the hook for some closing costs.   

Edited by NutterButter

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7 hours ago, soothsayer said:

So what happens if someone is in the middle of a refi process when rates go down? Can the borrower take advantage of a rate change in their favor or are they generally locked in at the rate when they signed the initial paperwork? Asking for a friend.

Well..... it depends really. If you are locked in then you are locked there are options but it won't come at a cost to you. If it is a significant difference and you are working with a broker, you can discuss with them about switching lenders. If you are with a direct lender or bank then your options are basically to change lenders and start over. Unless it was a streamline you paid for an appraisal. That appraisal may or may not be able to be used with another lender or you may end up having to pay for another one. 

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Rates did edge back up today though. For the most part roughly about an eighth of a point back up. 

Rats took a dive yesterday due to reaction of negative comments from the President on a deal with China. Markets seemed to recover from that a bit today. 

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On 12/2/2019 at 11:18 AM, Chadstroma said:

There is really no benefit in mortgage,  savings and insurance all at one spot. I mean, not even convenience. You will never call one number and take care of all three. You would get transferred around for one product or another.

Their service and reputation is really what USAA thrives off of. I bet if you contacted an independent insurance broker you could find some large savings. I think I mentioned it in the first write up that they were one of the few insurance places I did not personally shop but to beat out guys like Allstate or State Farm isn't all that much of a hard thing to do.  

But USAA insurance is mutual so members do get rebates back if claims are lower than expected vs. premium collections.  And they don't argue or shortchange coverage or defense.  Having been through a multiple seven figure claim with them I can assure you there is no other company I want at my back.

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3 hours ago, Chadstroma said:

Well..... it depends really. If you are locked in then you are locked there are options but it won't come at a cost to you. If it is a significant difference and you are working with a broker, you can discuss with them about switching lenders. If you are with a direct lender or bank then your options are basically to change lenders and start over. Unless it was a streamline you paid for an appraisal. That appraisal may or may not be able to be used with another lender or you may end up having to pay for another one. 

So all the 3rd party title costs, the lender just eats that if you decide to walk away?

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On 12/4/2019 at 7:46 PM, Ron Swanson said:

But USAA insurance is mutual so members do get rebates back if claims are lower than expected vs. premium collections.  And they don't argue or shortchange coverage or defense.  Having been through a multiple seven figure claim with them I can assure you there is no other company I want at my back.

That is why I said their service and reputation is what they thrive off of. I have no first hand experience. I have heard about cracks in their service recently though. A big article not too long ago about them getting a F rating with BBB or something along those lines.

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23 hours ago, NutterButter said:

So all the 3rd party title costs, the lender just eats that if you decide to walk away?

No cost of title if you don't do a loan. No new lien = no title work. 

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@Chadstroma, the lender who originated my loan about 5 years ago reached out to me for a refi.  How should I approach them, and how can I ensure I get the best deal on a refi?  I always thought they were a broker, but from the website it says they are a lender (First Home Mortgage).  The loan is currently owned by Chase.  I dealt with the local office back then and they did give excellent service.

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24 minutes ago, The Z Machine said:

@Chadstroma, the lender who originated my loan about 5 years ago reached out to me for a refi.  How should I approach them, and how can I ensure I get the best deal on a refi?  I always thought they were a broker, but from the website it says they are a lender (First Home Mortgage).  The loan is currently owned by Chase.  I dealt with the local office back then and they did give excellent service.

I was not familiar with them. I googled them and they are a direct retail lender (you can tell in the "about us" section a lot of the times if you know the lingo). They are the same kind of guys that try to recruit me by telling me how they can charge more for better comp for me. 

Best route to go? Go ahead and move forward with them since they did a good job. Then wjen the issue the Loan Estimate, take that to a local broker. You can search www.FindAMortgageBroker.com for one or ask me for one in your state. Then see what they can do. Most likely the broker will give a significantly better offer. 

From there decide if their service is worth the difference in cost. These are the kind of guys I hear say "I don't sell rate, I sell service" as if it makes them better. I don't sell rate either... but mine is still better than what they give.

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Oh, and as for them saying they are a broker... lots do. Some can actually broker out loans too but they often do so as a last result because they CAN'T make as much money as they CAN if they don't broker as the broker agreements are capped where direct loans and correspondence is not. 

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16 hours ago, Slapdash said:

@Chadstroma, love that stuff above.  Most people in the know will do best with a broker.  That is all I do since my first.

I think I mentioned it above but both my wife and myself worked at banks when we bought our two houses. Both times I went to a broker over our own banks even with the employee discounts involved. 

When I worked at banks previous to 2008, being someone who sucks at sales and it painfully honest and upfront, I would tell customers when it came up that they would be able to get a better deal from a broker IF they knew what they were doing. If they did not then most likely they would get screwed over and cost themselves tons of money but with me at the bank, here is the offer, no games, no surprises, no hidden things because banks are more regulated than brokers. 

Now... fast forward to today. Brokers are so much more restricted on what they can and can not do when it comes to mortgages versus banks in the sense of rate/cost. There is more freedom to brokers in another sense though as we can access lenders outside of QM safe harbor but that is a whole different discussion. 

I do bankers and realtors loans all the time. If you got into a Facebook group for Mortgage Loan Officers that was mixed between retail and brokers, it becomes very obvious very fast which everyone knows has the best rates/cost. It comes down to overheard. Brokers aren't paying for a LO, their boss, their boss's boss and their boss's boss's boss and then CEO's fifth summer home in Tahiti plus give some to the shareholders. It is the broker split and that split is the same regardless of how many people the broker has working for them or doesn't (Some broker/owners are one man/woman shops.... some have tons of people) and as I mentioned, brokers are capped out. Retail just charges more to cover the overhead. 

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@Chadstroma or others.

Will be buying a home in a month. Got prequalled with local broker and PNC. Great credit, 480 loan, 30 yr. 20% dn. Both quoted 3.875 for 30 yr./no points

While I have my credit unlocked, I'd like to get one more quote. Who would you recommend?

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