Dmoss,

You have some really good answers below. I just want to add one thing. Please use the A.P.R. figure that is posted on the form called the Truth in Lending (T.I.L.)

This is a percentage figure that will be slightly higher than the interest rate you were quoted. It is not a foolproof method of mortgage shopping, but it can be helpful. You need to compare each charge line by line on every quote you receive. This will take some time, but it could save you thousands in closing costs or over the life of the loan.

Here's how A.P.R. is calculated:

Let's say you are borrowing $100,000 at 7% and you have $1,000 in closing costs. The A.P.R. on a 30 year mortgage would be 7.10%

Here's link to a free A.P.R. calculator.
http://banking.about.com/library/calculators/bl_APR_calculat…

Good Luck!

Trey Bowden
Mortgage Lender
Oklahoma
(405) 340-3277

Fri May 16 2008, 13:31

DMoss -

As a licensed mortgage broker, I can tell you the best way for you to determine if the rate you have been quoted is competitive is to speak w/ 3 or 4 other brokers and be sure to compare not just the note rate but the APR.

The loan amount is not a factor in the competitiveness of an interest rate. If you provide all the brokers with the same qualifying factors (credit score, income, debt, etc) ask them to provide you with note rate, which is the rate you will be paying on the money each month. Secondly compare the Annual Percentage Rate (APR). The APR is the cost of borrowing the money. Costs include; origination fees, processing, underwriting, title, escrow, impounds etc.

I hope this was helpful. If you would like a referral to a dependable & honest broker in CA feel free to contact me - I have some contacts in the area.

Thu May 15 2008, 20:12

Dmoss,

Your have one part of the tringle complete which is your credit. There are alot of variables involved in a mortgage loan. I.E. Type of property, loan amount, LTV or amount financed. IF you are a first time homebuyer there are special programs for that as well as state assited programs. I can tell you those rates are competitive, however what I do not know is the amount of money you are paying in closing costs, whereas they do affect each other. I do know typically 1 pt usually buys the rate down .25 instead of .125 I would reccomend giving your scenario to a banker as well as a broker, as well as your credit union. Get goodfaith estimates from all 3. Good Luck with your new purchase, I have a good feeling you will get the excellent financing you deserve!

Brent Bester
Mortgage Professional
614-622-8916
bbester@usavingsbank.com

Thu May 15 2008, 18:42

Dmoss,

Without knowing what amount you're trying to finance, no one can answer the question you've asked. Loan rates are somewhat dependent on the amount, since most lenders make a percentage of the total, a lower amount means a higher rate, or additional fees to make the deal profitable for a lender.

Your credit is considered stupendous by any standards, and you should get the best rates, as long as your monthly income is consistent and stable.

The only way you will know if you are getting a good deal is to have lenders compete for your business. Get at least 3 different lenders involved, and be upfront with them. Tell them your shopping around for the best overall deal. Pick reputable sources, either your bank or credit union as one, and use references from others that have gotten good service combined with good rates.

Make sure that when you compare, you are working from a Good Faith Estimate or GFE, and be sure the GFEs were all created on the same day, since rates and terms can change from day to day, sometimes considerably.

Do not, under any circumstances, use a lender that tries to lock you in with a large up front application fee, that's just highway robbery, and an attempt to lock you in to them. Also, while less of an issue in your case, do all your shopping for a loan in one 30-day period. This way, no matter how many lenders you talk to, the credit agencies will consider all of the inquiries as a single event, with minimal impact to your FICO score.

As an example of rates, try bankrate.com. They can give you competitive rates in your area. While they don't rate lenders and almost anyone can provide a quote through their website, at least you'll see what typical rates are for your loan amount and terms.

Best of luck,

Jeffrey

Thu May 15 2008, 18:28