Have a blessed day!
Ronda Allen, Realtor and Certified Purchasing Manager
CEO of comingsoonhomes.com of Dallas/Fort Worth
RE/MAX Dallas Suburbs - Keith Dobbs Team
#1 Office and #3 Team for RE/MAX in the North Texas region at mid-year 2009!
Comparison shopping will help you, but with the new rules effective 1/1/2010, it will be difficult to get a GFE until you have already committed to purchase a property (as illogical as that sounds). Lenders will probably be issuing a different type of estimate (instead of the GFE) so that you can comparison shop before you find your dream home.
When comparing estimates you should focus on 2 numbers:
Cash to bring to closing, and
Your monthly Principal & Interest (plus Mortgage Insurance, if needed)
Ignore the amount each lender estimates for taxes and insurance, because they will all turn out to be based on actual taxes and which insurance policy you sign up for. So, the estimates are just a guideline -- don't take the lowest estimate as being the true amounts for Taxes and Insurance (the TI part of PITI).
Regardless of which lender says his fees are lower or that they have the best rates, provided they all quote you a fixed rate and the same term (length of payback), you should compare only P+I. For example, if the interest rate quoted is 5.125% on a 30 year fixed loan and your monthly P+I is $1,500, then you can compare that to all the other lenders to see whose interest rate is really lowest in terms of monthly payments. Some will quote you $1,523 or $1,479 a month, but it will be hidden inside the total monthly payment including taxes and insurance and hard to spot.
But the catch is that cash to close will vary from lender to lender. If the best monthly P+I quote needs $20,000 to close and another one needs $10,000 to close but the monthly P+I payment is $35 higher, which should you pick? Simple math will tell you that the $10,000 difference will take about 300 months (25 years) to recoup.
Yes, the seller may provide some of the cash to close, but doesn't that mean he won't give you that amount off the price? So, you can push the problem somewhere else, but you're still paying.
Please remember that fees are not the right thing to focus on. When you're buying a car, you don't ask which dealer charges the least for undercoating or dealer prep -- you look at the bottom line. Of course you still need title, tax & license (these are like TI). In lending, though, there really isn't any fluff like dealer prep, despite aspersions cast by so many calling the service fees "junk fees" -- they're real. It's just a lender choice whether they show up on the settlement sheet or not.
In this case there are 2 bottom lines to look at:
cash to close and total principal + interest per month, on the same terms.
Btw, the link below is to info on the RESPA act if interested and not to my web site...
Do you have a Good Faith Estimate from your loan officer?
I will gladly go over it with you and explain it from every angle.
For a lender to say: "Hey, I don't charge origination fee...." Well, that is false. They charge it up front or they charge it in the rate. Plain and simple.
Feel free to call or send me an e-mail with what your objectives, and loan parameters.
Office: 281-583-0674 Fax: 713-400-8915
We have No fees loans. fill out an application at http://www.JerryHolcomb.com and come sign the loan application. You will have a NO FEE LOAN (With Approved. credit)
Simple, when do you want to stop in and get started.
Congratulations on your new Home!
We also have lenders that have both low fees and low interest rates when you work through us.
Keller Williams Realty
What you may or may not know is that a good portion ( I will go out on a limb here to say) of credit unions (At least 90% of them) do not even originate their own loans. They send it out to another mortgage affiliate and I have found "in my experience" that they are not as experienced, competitive or knowledgeable as one would think about the home loan process. I am a loyal and happy client of a credit union but they have never been the best at rate or costs in anything they offer, however as some pointed out in here, client experience is important and I have had a great experience with them on everything except a home mortgage.
As for the comment, "found there seem to be a lot of sharks out there who will fight for high fees and think they're worth it.". That is kind of a biased statement especially because you are not a Loan Officer and you do not know how each mortgage company pays their Loan Officers. The pay structure in the mortgage business ranges from $15 per hour, 25%, 35%, 45%, 55%, 65%, 75% 85% and then you have to ask a percent of what? Respectfully, the pay ranges dramatically unlike you who demands 3% no matter the client experience.
I for one would not want a credit union employee who gets paid $15/hr handling my home mortgage transaction. I am sure many would agree with me here on this one. However, the experienced Loan Officer has more incentive to provide the client the best rate and terms and most importantly, "service" considering they get (A) paid well & (B) referrals. This is regardless of his pay cut which respectfully, you know little about. I am not being a cynic here but I stay out of Real Estate contracts for a reason.. I don't know about them and don't want to.
WOW ....you seem to have created a monstor here..... as you have found there seem to be a lot of sharks out there who will fight for high fees and think they're worth it. Luckily I found this out too one of my first days in the business when I was discussing intrerest rates with our in house mortgage person (when I worked for a different brokerage). When I asked him how he determined the interest rate for someone, his answer was "whatever I think I can get away with..." I knew then that I could never trust him with one of my customers and he never got any business from me.
I've typically had good luck with credit unions, Regions Bank, and Guardian Mortgage out of Plano. Credit Unions are not always as great as they used to be as many farm out the loans to a 3rd party now. From what I understand Guardian and Regions have limits as to what their loan officers can charge or make on loans. Several of my clients have used Guardian over the years and consistantly they have both competitive rates and low fees, plus they're the only lender I've seen never miss a closing and the only one to have had docs to the title company as much as two weeks early. All these lenders in my experience though also work best with great credit and reasonable loan terms. I've used other lenders if you want to do something out of the norm or your credit is challenged.
As others have mentioned, sometimes you have to be careful with this type of question. Some loan officers are known to focus on one idea or the other....sell you low/no fees but hit the interest rate high to make up for it. If you are focused on rate, then they will make rate low, but charge high fees. So that's just something to keep in mind.
Good luck and let me know if you need a referral.
To Bill Pollack I would say although you have been very knowledgeable in the past, from my many years in the biz I would never send a first time homebuyer to bankrate.com, although the addenda after that stated the RESPA changes on 1-1-10 will forever change these internet brokers and their "offerings"
I will be contacting the links that people responded to me!
I can certainly understand your concern but it is very important to know that when it comes to the mortgage industry you generally pay for what you get. Any lender can offer you a high rate and cover all of your costs but then you are paying for it the next thirty years! How long do you plan on living in your home? Why are the overall closing costs so important to you? Did you know that you can negotiate the contract to have the seller pay most if not all of your closing costs? Lenders have to charge fees in order to make money just like every other company does. If you hear a lender that is not charging you any fees then they are making their money on the interest rate. Many banks prefer doing this as it sounds like a better deal when its not. Did you know that the loan origination fee is a tax write off for the year that you buy your home?
Terra when it comes down to it you need to do whats best for your family but be careful what you ask for and educate yourself about the outcome. I hope this helps and see my website for more information or to contact me. Thank you.
We can provide you with a pretty reasonable rate and no origination, underwriting, processing not application fee (which large lenders tend to charge). You just pay your taxes, insurance and interest (however, we may have a solution to pay that as well). We are direct and are a national lender.
Let me know,
Depending on the loan amount... ANY lender can offer lower fees for a higher rate.
BofA does this all of the time.
Great strategy if you plan on being in the home a short time.... as you effectively just rolled the fees into the rate and made them tax deductible.
Bottom line.... every bank has to pay a lot of people to work your loan file. Fees cover those salaries. Low fee deals have always been around and any bank can do them. They get a rebate when they sell your loan(with the higher than par rate) to cover their fees.
Talk to your loan officer about rolling fees into the rate.
Again.... depends on loan amount.
Do you want to know the secret behind rate and fees?
The lower the rate the higher the fees and the Lower the fees the higher the rate.
Pretty Simply math.
Now, as a Mortgage Banker I can offer you either low rate or low fees.
The BIG question is which is best for your needs...?
Over time the cost upfront may save you Thousands of Dollars overall.
But, if you only plan to live in the house a few years then lower fees is best.
give me a e-mail at email@example.com and I will show you the difference and you pick what is best for you.
I guarantee what I quote you will be exactly what you get at closing.
I will make it simple and save you money on your loan.
But you can't have low fees and a low interest rate.
TRUE/ACTUAL cost for appraisal, credit report(s), flood and tax cert.
That is ALL. Every other cost to you comes from closing, recordation and title costs.
PS If you are already WORKING with an agent from Wells Fargo Home Mortgage, please disregard.