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Mortgage Rates (4 Viewers)
- Thread starter MechEng
- Start date
skycriesmary
Climbing up the Walls
DA RAIDERS
Footballguy
Funded yesterday
Johnny Rock
Footballguy
Did my cash out refi last week. Finally moved from 5.00 to 3.75.
Freddie Mac fees have sure skyrocketed since the 2008 correction. .875% for cash-out fee and .50% for 80% LTV fee. I don’t remember fees that high before. Thank you sub-prime lenders?
Freddie Mac fees have sure skyrocketed since the 2008 correction. .875% for cash-out fee and .50% for 80% LTV fee. I don’t remember fees that high before. Thank you sub-prime lenders?
NutterButter
Footballguy
dancingbones
Footballguy
-OZ-
Footballguy
I'm getting really tired of the multiple mortgage companies calling me these past two weeks. It's not even the same companies. The conversation always (when I bother talking to them) goes like:
Them: hello, is this Oz?
Me:. Who is this?
Them: I'm calling from...
Me:
, (usually hangup)
Them: I see you have a VA mortgage with $310,000 left and a credit card balance of $8,000
Me: where do you see that? It's not accurate now
Them: ok, how much do you owe now
Me: let's cut to the chase, can you beat 3.25 with no points?
Them: that's a great rate... Do you want cash for improvements?
Me: nope, just beat the rate with no out of pocket expenses
Them: well we can't do that but...
Me:
I could be wrong, but the info is pretty close to what I had when my previous mortgage company sold the mortgage to Citizens one, about 6 months ago (including cc balance which gets paid every month)
Them: hello, is this Oz?
Me:. Who is this?
Them: I'm calling from...
Me:
, (usually hangup)Them: I see you have a VA mortgage with $310,000 left and a credit card balance of $8,000
Me: where do you see that? It's not accurate now
Them: ok, how much do you owe now
Me: let's cut to the chase, can you beat 3.25 with no points?
Them: that's a great rate... Do you want cash for improvements?
Me: nope, just beat the rate with no out of pocket expenses
Them: well we can't do that but...
Me:
I could be wrong, but the info is pretty close to what I had when my previous mortgage company sold the mortgage to Citizens one, about 6 months ago (including cc balance which gets paid every month)
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NutterButter
Footballguy
The blocked caller list is one of my favorite phone features. Really comes in handy with recruiters as well.
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skycriesmary
Climbing up the Walls
Sent!NutterButter said:
NutterButter
Footballguy
How does 3% in NJ for a 15 yr with 2200 in closing costs (no points) not including appraisal (not sure if needed yet) sound?
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Mario Kart
Footballguy
So, it looks like there shouldn’t be any hangups with my refi. How good is 3.385% in the current market?
I’m still debating pulling my savings back and investing it instead of paying the amount I have been paying once my new payment goes into effect. Not sure though.
I’m still debating pulling my savings back and investing it instead of paying the amount I have been paying once my new payment goes into effect. Not sure though.
NutterButter
Footballguy
If you're talking 30 and no points, that's probably as good as it gets.
I'm debating the same thing you are but about the loan duration. I was originally thinking 15, but now I'm probably going 30 and investing the payment difference. If you have the self discipline to follow through on the investing, I think its the way to go.
Mario Kart
Footballguy
If I keep paying the amount I was before, my loan will end in 2040 instead of 2041 (like 15 months earlier). However, the trick now is, could I invest the difference to overcome the 10 years (if I pay the minimum), or the 1 year (if I maintain the same payment).
My head tells me different things each day. Ultimately, I think I’ll go with $100 more, like I have been, and pull the $77 a month savings to invest. We’ll see.
Capella
Footballguy
NutterButter
Footballguy
Btw, with whom are you getting 3.385 with no points on a 30? I'd like to give them a call.
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Mario Kart
Footballguy
The people I have the mortgage with already. Made one call and that is the number they gave me. I guess it’s legit.
NutterButter
Footballguy
Do these people have a name or do you want to keep this awesome rate all to yourself?
Mario Kart
Footballguy
The company is Mr. Cooper. No joke. They are based in California or somewhere because that is where I get phone calls from for my information.Do these people have a name or do you want to keep this awesome rate all to yourself?
skycriesmary
Climbing up the Walls
Mario Kart
Footballguy
I called them a couple weeks ago because they have my mortgage and I called because I now have 25% equity due to home prices going up in my area. I called, they offered a .5% reduction. So, I followed their steps and they called me with a 3.385% (.5% less) and what am I to do?
skycriesmary
Climbing up the Walls
ghostguy123
Footballguy
Yeah seriously.
I have a 15 year at 3.75. What are the odds I can get them to lower the interest rate with absolutely zilch of a cost?
I suppose maybe I threaten to take my business elsewhere if they cant bump me down.
-OZ-
Footballguy
NutterButter
Footballguy
-OZ-
Footballguy
NutterButter
Footballguy
That's where I'm at as well. I could care less if I have a mortgage or for how long. I'm just trying to maximize my money.-OZ- said:
Rattle and Hum
Footballguy
Might I get a PM with your mortgage wizard info, kind sir? The Hummers are buying a house it seems (at least that's what the PA indicates). Cheerio
skycriesmary
Climbing up the Walls
ghostguy123
Footballguy
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?
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?
skycriesmary
Climbing up the Walls
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.
Mario Kart
Footballguy
Signed the paper work on Wednesday. Wrote out a check for December so I don't have a house payment till January at the new rate.
Cost of issuance and lack of amortization are hard to make up since you have very little interest left.
ghostguy123
Footballguy
Chadstroma
Footballguy
Chadstroma
Footballguy
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.
Juxtatarot
Footballguy
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.
ghostguy123
Footballguy
Chadstroma
Footballguy
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.
#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.
skycriesmary
Climbing up the Walls
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.
Chadstroma
Footballguy
No, not hard. At 5.25% rate, you are leaving money on the table even at 2 years. But that is up to you.
skycriesmary
Climbing up the Walls
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.
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Chadstroma
Footballguy
Not doing it because you think it doesn't make sense is a whole different story from doing it because you can't.skycriesmary said:
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.
skycriesmary
Climbing up the Walls
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.
Chadstroma
Footballguy
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.
skycriesmary
Climbing up the Walls
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).
Ron Swanson
Footballguy
What about mortgages does USAA not do well in your experience?Chadstroma said:
