Posted on: 04th May, 2009 03:30 am
My husband and I have finally found our hopefully soon to be first home. Don't need both of us for the loan application because we aren't coming close to what he qualifies for by himself (he was prequalified for 228K and we recieved our signed sales agreement in the amount of 166K on Friday, May 1, not a foreclosure or short sale).He has a fico score of 709 and virtually no debt. Pulled together all the information requested for one mortgage broker's application and would like to submit this "packet" to other lenders too. But that's where my frustration begins... Our sales agreement gives us a due diligence of 14 days as of May 5, and we can't order the FHA appraisal until we choose our lender (please correct me if I'm wrong). So given our circumstances I feel pressured to hope for the best with this one lender, but common sense says we have worked very hard for nearly 2 yrs to improve our credit for this reason(buying a home) and should make the most of it by shopping and comparing offers. My concern is mainly directed towards the fact that if we don't move quickly we will have such a small window to find out if the home appraises for the agreed amount (told not to worry about that) to proceed with the inspections we want to have (home, septic) Did we "miss the boat" by not shopping for our loan ahead of time? If not, please advise me on how we should/who we should shop around with? Also, am under the impression that banks are far slower to process a loan and get you to closing but generally have less closing costs than a mortgage broker? (want to make sure that the agreed amount the seller is paying towards closing costs is sufficient $5,500.00). Any advice would be greatly appreciated. Thank you ahead of time! ...oh by the way, we are in the Atlanta area.
Laura
You definately should have been working with a loan officer well before you found your home. That is water under the bridge now.
Are you using an attorney? Have him or her alter the sales agreement to extend the date in which you need to have a mortgage commitment. This should buy you time so you can choose the right lender for you.
You definately should have been working with a loan officer well before you found your home. That is water under the bridge now.
Are you using an attorney? Have him or her alter the sales agreement to extend the date in which you need to have a mortgage commitment. This should buy you time so you can choose the right lender for you.
For all FIrst Time Home Buyers: Shop for a loan officer prior to shopping for a home. Once you have narrowed your selection down, proceed to looking at some homes. Get yourself pre-qualified and make sure you feel comfortable with this loan officer. Call a few local lenders and give them the basics of your particular scenario and see what quotes they offer. If they differ dramatically, then you may want to try for an extension on the contract. I hope this helps...
you've been given a good bit of advice by eric. by all means, have your dates extended.
who prequalified your husband? and why is it that you lack confidence in that person/lender such that you find it necessary to shop around?
sorry, but i have to stand up for the guy who worked with you through your process. it's a shame to make someone work diligently and hard for ZERO dollars. you work for a living, i presume, and that makes think that you wouldn't care to work for nothing, either.
by all means, go ahead and shop, but...
as for the advice about working with someone before you buy: that's good advice for everyone, but in this case, you obviously had been working with someone. that's not the error of your ways. your biggest misstep was in allowing the contract to be written contrary to what is typically prudent, and, presumably, not having a lawyer review it on your behalf.
who prequalified your husband? and why is it that you lack confidence in that person/lender such that you find it necessary to shop around?
sorry, but i have to stand up for the guy who worked with you through your process. it's a shame to make someone work diligently and hard for ZERO dollars. you work for a living, i presume, and that makes think that you wouldn't care to work for nothing, either.
by all means, go ahead and shop, but...
as for the advice about working with someone before you buy: that's good advice for everyone, but in this case, you obviously had been working with someone. that's not the error of your ways. your biggest misstep was in allowing the contract to be written contrary to what is typically prudent, and, presumably, not having a lawyer review it on your behalf.
Hmmm, I never even thought to have an attorney review the contract, but I did contact a closing attorney last week to ask if I could have a meeting with him to look over all offers once recieved and advise us as to if anything was alarming in any of them... as far as us working with someone - we have been working with an buyer's agent on this particular house (signed a contract with him exclusively with this address). He had his inhouse lender contact us, ask us preliminary questions regarding what we qualified for and then responded with the information that I profided initially on this message board). I did not feel that I had abused anyone's time and efforts thus far.
i wasn't so much implying that you had abused the loan officer's time and efforts, as i was hoping to stand up for someone who might have worked hard to help you.
obviously, your contact with that lender was short (though effective), and there's no reason for you to continue if there was no real connection.
it strikes me as odd that your agent would have allowed this short period of time for commitment. quite odd, actually.
obviously, your contact with that lender was short (though effective), and there's no reason for you to continue if there was no real connection.
it strikes me as odd that your agent would have allowed this short period of time for commitment. quite odd, actually.
George, was that a red flag that we have been given a short period of time for commitment? What is an average amount of time? We have been given a closing date of May 29 with an automatic extension of 7 days if there are delays concerning title or loan...
On another note, I don't lack confidence in this particular lender. Just that I have read that by shopping, lenders are apt to compete against one another which ultimately can assure us the best offer possible. Also read that buyers often settle for a loan when they were applicable for a better one because they don't shop... ? Is there any variance in the loan rate in a FHA based on a borrower's application, or is our rate the same of one who just barely meets the requirements for the same loan? If that is the case then the only thing to concern ourselves with would be the APR (still really foggy with my understanding of that number) and/or the closing costs provided in a good faith estimate.?
On another note, I don't lack confidence in this particular lender. Just that I have read that by shopping, lenders are apt to compete against one another which ultimately can assure us the best offer possible. Also read that buyers often settle for a loan when they were applicable for a better one because they don't shop... ? Is there any variance in the loan rate in a FHA based on a borrower's application, or is our rate the same of one who just barely meets the requirements for the same loan? If that is the case then the only thing to concern ourselves with would be the APR (still really foggy with my understanding of that number) and/or the closing costs provided in a good faith estimate.?
not sure about it being a red flag, but it's pretty short in my opinion. i've never heard of an "automatic extension" due to delays. our agents locally have to scramble to get extensions done most of the time.
most lenders are foggy about annual percentage rates - don't feel bad, laura. as for rates, the rates are pretty similar, and credit score has no bearing on fha products. there are lenders who purposely post low rates to grab the business, there are some who don't. costs must be taken into account. don't just grab the lowest rate because it's pretty. compare and contrast one lender's rate and costs with another's. but by all means make sure you can count on your loan officer to back you up.
getting the best rate won't do you any good if you have a stumblebum for a loan officer. yes, they really do exist.
most lenders are foggy about annual percentage rates - don't feel bad, laura. as for rates, the rates are pretty similar, and credit score has no bearing on fha products. there are lenders who purposely post low rates to grab the business, there are some who don't. costs must be taken into account. don't just grab the lowest rate because it's pretty. compare and contrast one lender's rate and costs with another's. but by all means make sure you can count on your loan officer to back you up.
getting the best rate won't do you any good if you have a stumblebum for a loan officer. yes, they really do exist.
Okay, so let's say "hypothetically" that you apply with two lenders and you recieve the GFEs, one, says they are a direct lender who approves their own FHA/VA loans and the second, a community, but quickly growing, bank (three new locations in the last year locally)...
a) they both quote nearly the same closing costs
b) the small town bank offers their interest rate as 0.3% less than the "direct" lender
c)the direct lender says he can move your loan thru in a matter of 2/3 weeks verses the bank who says 3-4 weeks
d)you are not necessarily in a hurry to get in the home but don't want to go to closing the first or second week of June and end up paying that astronomical rate of interest for the remainder of the month
Are there any other factors to take into consideration beyond what's been stated when choosing? I know that earlier in this message board "connection" was mentioned but if that doesn't happen with either...
what is left to make an informed/the right decision? And is there any way for a homebuyer to find out what the REAL FHA closing rate is on any given day?
a) they both quote nearly the same closing costs
b) the small town bank offers their interest rate as 0.3% less than the "direct" lender
c)the direct lender says he can move your loan thru in a matter of 2/3 weeks verses the bank who says 3-4 weeks
d)you are not necessarily in a hurry to get in the home but don't want to go to closing the first or second week of June and end up paying that astronomical rate of interest for the remainder of the month
Are there any other factors to take into consideration beyond what's been stated when choosing? I know that earlier in this message board "connection" was mentioned but if that doesn't happen with either...
what is left to make an informed/the right decision? And is there any way for a homebuyer to find out what the REAL FHA closing rate is on any given day?
Hi Laura,
You can check out if you will have to pay points during the closing. The discount points are prepaid interest on the mortgage loan. If you pay more points you can get a lower interest rate. These points are also tax-deductible. On the other hand, origination fees are charged by the lender to cover the costs of making the loan. It is tax deductible only if it was used to obtain the mortgage.
As far as the rates are concerned, you can check them online. This will let you know what type of rates you can expect on a given day.
You can check out if you will have to pay points during the closing. The discount points are prepaid interest on the mortgage loan. If you pay more points you can get a lower interest rate. These points are also tax-deductible. On the other hand, origination fees are charged by the lender to cover the costs of making the loan. It is tax deductible only if it was used to obtain the mortgage.
As far as the rates are concerned, you can check them online. This will let you know what type of rates you can expect on a given day.
laura if you think it's worth taking on yet a third lender such as the guy above, all i'll say is that God had better be looking over you.
a "real" fha rate - as opposed to what? we are not operating in alternative universes here. an fha rate is an fha rate...i think someone put things in your mind that don't belong there. and, of course, the "astronomical" interest you would pay during a june closing would amount to 2-3 weeks' worth of interest, with the first monthly installment coming due in august (no july payment).
i don't mean to criticize your thinking, but i do honestly believe you are over-analyzing the situation. you noted about a week's difference in the quotation of processing time; keep in mind that either of them could be wrong, too. and of course a 2-3 week time could end up being 3, and a 3-4 week time could end up being 3. oh look! it's the same!
your best choice in my opinion would be to go with the individual loan officer who cares the most about giving you good service, being attentive to your needs and exhibiting professionalism throughout the process. perhaps both of them are equal in that, making it a tougher choice.
you seem to be speaking highly of the bank, which leads me to believe that you're leaning that way.
i don't know if all i've noted here is especially helpful; i hope so.
a "real" fha rate - as opposed to what? we are not operating in alternative universes here. an fha rate is an fha rate...i think someone put things in your mind that don't belong there. and, of course, the "astronomical" interest you would pay during a june closing would amount to 2-3 weeks' worth of interest, with the first monthly installment coming due in august (no july payment).
i don't mean to criticize your thinking, but i do honestly believe you are over-analyzing the situation. you noted about a week's difference in the quotation of processing time; keep in mind that either of them could be wrong, too. and of course a 2-3 week time could end up being 3, and a 3-4 week time could end up being 3. oh look! it's the same!
your best choice in my opinion would be to go with the individual loan officer who cares the most about giving you good service, being attentive to your needs and exhibiting professionalism throughout the process. perhaps both of them are equal in that, making it a tougher choice.
you seem to be speaking highly of the bank, which leads me to believe that you're leaning that way.
i don't know if all i've noted here is especially helpful; i hope so.
George, thank you for taking the time to answer my questions... very appreciated and believe it or not put a little humor into this whole headache for me. No worries as for taking on someone like the "guy above";) When I wrote of the "real FHA" rate, I was referring to what I read about, which is that FHA sets the rate and lenders do come close to that but not necessarily adhere to it. When I asked one lender how can find out what the rate is each day prior to locking in, she said "you have to call me and ask me"... so on day, one lender said that it was 4.7% and on that same day, same hour, another said 5.0, thus my question... Nevertheless, I have decided to go with the direct lender who is more than confident that there will be no problem closing on or before the 29th (wanted to close us next Friday as a matter of fact) and that the other lender is quoting me a "grab me" rate and that at closing I will probably end up paying the same as the direct lender anyways, and almost certainly after the 29th since they have said that date is out of reach for them to process the loan. So, having said all that, I believe I will stop "overanalyzing" the loan aspect of this homebuying experience and go direct my fears towards other topics... such as the home inspection haha!
oh yes...home inspections will reap you a bountiful harvest (of things to do).
it is a harrowing experience, and it certainly looks like you've done some proper analysis. i think you're all right.
it is a harrowing experience, and it certainly looks like you've done some proper analysis. i think you're all right.