Financing in San Diego>Question Details

Fred Posner, Home Buyer in San Diego, CA

Mortgage Guidelines

Asked by Fred Posner, San Diego, CA Mon Mar 23, 2009

Hello everyone. I know most of you are prospective buyers/sellers and/or agents, but I have seen some mortgage brokers/lenders floating around, and know agents are usually tied into a broker or two. My question is around a 30-year fixed mortgage. Specifically, are there any "standard guidelines" to follow in terms of what percentage the origination fee should be? Any do's/don'ts regarding the process? I received a quote that had an origination fee of 0.5%, which I was told is decent, but have also heard of others getting 0% origination fees (with no hidden costs). Any thoughts or suggestions about the proper path to take when setting up a 30-year fixed (not a refi)? Thanks.

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This is a lender specific charge and is shopable. You want to make sure you look at the loan breakdown as a whole and not just the points. The APR is the best way to look at the total cost of the loan. If you have any further questions, feel free to email me.

Regards,

Mark DeWitt
Bank of America Home Loans
San Diego, Ca.
858-212-7054
Mark.DeWitt@bankofamerica.com
0 votes Thank Flag Link Wed Jan 6, 2010
Hi Fred

You should shop around for your best loan with the least amount of costs to obtain a good interest rate. You will find lenders that will have a 1% loan origination fee or less. This is where the mortgage broker or bank is making their money. You will also want to pay attention to the garbage fees when comparing lenders.

For those that don't have a loan origination fee they are basically getting the fee on the loan rate they are giving you. It can get pretty confusing but if your plans are keeping the home for quite a while getting the best loan rate is probably your best bet, while if you are selling within the next 5 years (Be careful) you may want to find the lowest cost loan - you can take the difference in savings and found out how much time it will take to break even.

You can use the APR to give you somewhat of an idea which loan is best for you.
0 votes Thank Flag Link Mon Mar 23, 2009
There is no "standard" fee and it is always negotiable.

The best idea is to talk to several different lenders in different places. Be open with them about what you discovered from other lenders. You can start with recommendations from friends or co-workers who have a good experience recently (past six months or so).
0 votes Thank Flag Link Mon Mar 23, 2009
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