Home Buying in 92620>Question Details

Eric, Home Buyer in 92620

I have a credit score of 750 , and I would like to take advantage of the first time homebuyer credit. Is there any difference between going to a?

Asked by Eric, 92620 Wed Jan 20, 2010

broker or directly to say Bank of America? Also, I've heard you can get a FHA loan and only put 2.5% down. What should my next step be before looking for properties? Thanks!

Help the community by answering this question:


Hi Robin, I am able to do both loans and real estate in the same transaction in California. There is a new requirementfor us brokers to register our license if we do loans, but nothing about not being able to broker the loan and real estate at the same time (at least last I checked). You're also right that I was able to do the loan at par because of the real estate commissions. I also wanted to do the loan at par in order to limit my liability.

Bonnie - It wasn't a personal attack. Robin is correct to say that you are doing a disservice to people like Eric by stating he should use a direct lender. Each person is different and the way they aquire funding should be based on their qualification and goals.

Eric - I saw that you were looking to buy short sales. I consider myself an expert in short sales and teach other agents on how to buy and sell them. It will be hard to pull it off in time for the tax credit, but you might get a short sale cheaper than bank owned. Here's my blog on how to buy a short sale:

0 votes Thank Flag Link Thu Jan 21, 2010
Dear Robin: (and all)

First of all, I was reading through the comments and felt that the conversation thread has gotten a bit off the subject of what Eric needed an answer for. He is a local buyer here in California, and it is possible that your market is different. Then I saw your comments and felt I had to respond.

Your statement that I am doing a disservice to my clients is NOT appreciated. Your base for that comment is mistaken. I work very had for my clients, and their needs are paramount in my work ethic and integrity. As you searched my website, you obviously did not know the lenders you were making comments about, and then criticized my services in this forum, which is supposed to be helpful to posters like Eric: (Sorry, Eric - maybe this info will be helpful to you, as well)

Debbie Burt, BofA:: I have worked with her for several years and have immense respect for her work ethics and how well she has always come through for my clients. SHE IS A DIRECT LENDER. She goes above and beyond!!!

Robert and Fidencio at Guild Mortgage: They both specialize in the disabled community, and also are the leading lenders for teachers in the state of California. THEY ARE A DIRECT LENDER. Their care and personal involvement in the deals makes it a pleasure to work with them. My clients are not just an address to them, but rather people with stories and dreams they want to help them reach.

Mr. Chris Smith, Professional Home Mortgage: I have know Chris for several years, and he also is a great mortgage broker. Ethics and integrity are unquestionable. I also know that he does work with some DIRECT LENDERS who will provide that letter that is required in so many of our transactions. I trust him and admire him, as well.

So you see, it is not always what you THINK is true that is truth. These are three exceptional professionals who can provide DIRECT LENDER LETTERS for my clients when requested by listing agents, and they have NEVER let me or my clients down.

I wish you had sent me a private email so that I could have explained this to you directly and before you posted such a biting critique of my abilities and work. Unfortunately, I just felt I needed to defend myself a bit in this response. I have a great base of clients, love them all, and work "harder than the average bear" to get their needs met. My husband and I work 7 days a week in this market, and would NEVER mislead a client. Many of my clients are on my testimonial page, if you're interested.

Also, I was a speaker at the Century 21 LLC Top Agent Retreat last year in Florida...a good measure of the respect I have garnered in the business.

If these lenders were not GREAT, they would NOT be on my website. I don't get a thing from advertising them -- just the satisfaction that my clients are dealing with who I consider to be the best of the best. They have done work for myself and my family and close friends, so I know first-hand the excellent service they provide.

I'm not mad...just wanted to clarify for Eric.

Bonnie Scribner, REALTOR, QSC
DRE #01447853
Cell: 714.296.0513
Century 21 Discovery
0 votes Thank Flag Link Thu Jan 21, 2010
Satar, if I made as much as you do on a real estate transaction, I might do the loan for free too. Someone recently posted something about not being able to be both a realtor and a loan officer any more. That may just be in the same transaction. Not sure if anyone can confirm this.
0 votes Thank Flag Link Thu Jan 21, 2010
Thanks Robin. You are correct.
I should have stated:
A) ANY fees they charge you to do the loan.

When I was doing loans, I would do par rate if I was also doing the real estate transaction.
0 votes Thank Flag Link Thu Jan 21, 2010
Satar, the second part of your explanation is a good one, but the beginning is a bit deceiving for 2 reasons, first of all, not all brokers charge points, even though they are earning a YSP. (These are what they call the back end points). Believe it or not, there are some loan officers that will work on a 1 point total margin, and do not thing they need to make a killing on every loan. The reality is, no one gets the par rate without paying points, whether they use a bank or a broker. Somewhere along the line, someone is making a profit, otherwise we wouldn't be in business. That would be like an agent selling a FSBO without getting paid, and the buyer would be getting the better deal because there is no profit going to the agent.
0 votes Thank Flag Link Thu Jan 21, 2010
Hi Eric,
You've got good answers below. I like to keep it simple:
1. Get approved with a major bank first (many sellers now are requiring approval from a major bank)
2. Provide your agent with everything he or she needs to write a complete offer:
- Approval letter
- Deposit check
- Copy of bank statements
- Copy of Credit report
3. Go find a home you love!

FYI - you are going to want to be in escrow by the end of March so that your loan can close on time to take advantage of the tax credit.

GOOD LUCK! Hope this helps.
0 votes Thank Flag Link Thu Jan 21, 2010
Hi Eric,

To answer your questions:

1. First off, let me give you some background:
A loan broker makes money in two ways:
A) The fees they charge you to the loan. Usually called points, processing fee, etc. Points are usually a percentage of the loan amount. For example, if a broker charges you 1 point, he is charging you 1% of the loan. So on a 400k loan amount, he is charging you $4,000 to do the loan.
B) The money he gets from the lender for increasing your rate or modifying your terms of the loan. This called a rebate. For example, if you qualify for 5% interest rate loan and the broker makes your rate 5.5%, then the broker will get money from the lender.

Now that I said that. A loan broker has to disclose how much he is charging you upfront and any rebates or money he gets from the lender from the back. A BofA loan officer, doesn't need to disclose the back. He only needs to disclose the front.

I suggest a broker as they can shop around your loan for you to get the best deal and they provide for some flexibility should you hit a snag with underwriting guidelines with one lender. If you go to BofA and hit a snag, then there is nothing else you can do.

2. FHA loans are 3.5% down. Their costs are fixed so nowhere where you go, it should cost you the same. FHA loans have some restrictions on the properties that they will loan on. Also, by putting 3.5% down, you will need to pay back a bigger loan, so it might limit the properties you can afford.

3. Your next step should be to talk to a mortgage broker to see what loans you qualify for and for them to discuss with you how much you want your monthly payments to be. Once you have an idea of how much house you can afford, then you need to find a real estate agent you can trust to show you property.

Personally I would choose someone who is well rounded in both loans and real estate to sit down with you to go over your goals and find the best path for you to achieve them while looking out for your best interests.

Good Luck!
0 votes Thank Flag Link Thu Jan 21, 2010
If you bank at Bank of America you may receive a quarter point reduction for automatic withdrawl of mortgage payment....but I would use a broker because they can offer many loan products from a variety of lenders. FHA requires 3% down... ALWAYS FIRST STEP is get qualified for loan so you know what price range to look at and not waster your or realtors time. New rule for FHA buyer will be in effect Feb 1, 2010 that will be in your favor because otherwise FHA buyers have stiff competition from cash buying investors who steal the killer deals. The buyers that get accepted offers are ready to go and have their loan and deposit money ready to send with offer.
Good Luck .....I would suggest Woodbury from your zip code it is an excellent area!
0 votes Thank Flag Link Wed Jan 20, 2010
Bonnie, I am not in competition with your recommendations, because I am on the other side of the country, but I think that you are doing a disservice to your clients to recommend that they only go to a direct lender. What is particularly funny is that I went to your website, and you have three different naems, one person from what I would call a brick and mortar bank, one from a mortgage banking company, and one who is a broker. I would imagine that these are all people who you trust, and you know that when they say they can get your customer a loan, they will. There is no reason for someone to pidgeon-hole themselves with one lender who only has one product to sell. As Ted said, if work with a mortgage banker, who would be considered a direct lender, they work with the correspondent lending divisions of the banks, and are most often able to pass along the best rates. You have given the impression that sellers will not accept prequalifications from these people.
0 votes Thank Flag Link Wed Jan 20, 2010
Hi Eric,

April 30th is your last chance to obtain the first time home buyer's tax credit...Time is definitely running out!!! Since it's a buyer's market right now...chances are, you will be seeing many homes and submitting many offers before one is actually accepted. Whether you obtain a loan from a mtg broker, or a direct lender would not affect your eligibility for the program. I'd recommend you actually getting a preapproval letter from a big lender like BofA because most sellers are asking for them nowadays. But normally, a mtg broker should be able to get you a better interest rate and find more aggressive programs!

Remember, there are requirements to the first time home buyer tax credit program:
1. You must have not owned a home in the past three years
2. Your gross income level does not exceed $125000 annually
3. You must be 18 yrs of age
4. Home cannot exceed $800,000

If you have any further questions, feel free to contact me anytime! I'm always here to help....

Thank you,

Patrick Pham
First Source Solutions
0 votes Thank Flag Link Wed Jan 20, 2010
Hi! I wanted to put my opinion forward to you:
The information below is ok, but I wanted to suggest that you look at my website and contact the three lenders on my home page. They are people who I work with and have always given my clients great service!! I would suggest that you get a loan from a direct lender. Often, the listing agent will require that you have an approval letter from a direct lender instead of a broker. This needs to be submitted with your offer. If you don't, they will sometimes have you cross-qualify with their direct lender. I am not a fan of having your information given out to many different people in the course of placing offers and getting offers accepted. Depending on your price range, it could take several offers before one is accepted.

The first is to definitely get your loan in place. That way, we're ready to place an offer, and you know exactly what you will be able to afford.

You do need to be under contract by the end of April, and close escrow by the end of June to qualify for the $8000 first time homebuyer tax credit...so you need to aggressively start your search. Another service I can provide is to set up a personalized free website for you that uses your criteria to search. You receive updates on additions or when the status changes.

When you see listings on Trulia, Redfin, Zip Realty, or Realty Trac, they are not PURE MLS listings.

This is because these internet sites take information from the County Recorder's office, which is "public information", that is free. If these huge internet sites were to sign up for every MLS it would cost them a fortune to belong and pay the fees for every MLS that they show listings for NATIONWIDE.

Local Realtors have the most up to date and accurate information for property that is currently available. MLS Realtors pay for and have access to all of the local up to the minute information without all of the pending, sold and transferred information mixed in. Public internet sites get information “Second hand”, and convert it into a format that cannot distinguish between pending, sold, and other property recordings such as notices of default, foreclosures, tax liens, transfers and many other recordings that show up as properties for sale.

P.S. Great job with your credit score!!!

If I can be of any assistance, please give me a call or email. Bonnie

Bonnie Scribner, REALTOR, QSC
DRE #01447853
Cell: 714.296.0513
Century 21 Discovery
0 votes Thank Flag Link Wed Jan 20, 2010
Your best bet is working with an experienced Realtor in you area. I can help you out with getting a loan, finding you a home and getting this done in a timely manner. If you looking to cash in on the $8,000 tax credit you need to move fast because time is running out and with todays market it takes about 30 days to get an offer to stick. You are going to need a Realtor who is ready to write offers for you the day the come out on the market, giving you the highest chance of getting your offer accepted! I explain all of this in my VIP Buyers System on my website at http://www.vgrouphomes.com/atj/user/AdditionalGetAction.do?p… If you are serious about buying you need to start looking now and getting prequalified.

Wish for the best,

John & Sarena Villaescusa
Keller Williams Realty
Cell: 562-818-2671
Email: Johnv@kw.com
Website: http://www.VGroupHomes.com
Web Reference: http://www.VGroupHomes.com
0 votes Thank Flag Link Wed Jan 20, 2010
FHA is 3.5% down, contact/visit qualified loan officers and choose the one you like best--very little difference if any by going direct or with a mortgage broker--
0 votes Thank Flag Link Wed Jan 20, 2010
Hi Eric,

First....great credit score :). And I can help you with your questions.

The first-time home buyer credit is from the Federal Government and you access it after your close escrow via filing your taxes. It's a refundable credit....so if you would normally get a refund of say $1000 you would get $9000 instead. It has nothing to do with the lender and it's not something you can use during the process.

As of right now FHA downpayment is 3.5% and there is also sometimes opportunity to use Homepath Financing through Fannie Mae which is a 3% down payment. I can help you get more information on these options.

If you have not found an agent to work with you....I'd love to help. You might start by looking on my Trulia Profile, read some blog posts and my questions/answers to get an idea of who I am and how I work. My website is also referenced below and you can do some more research there too. If you are interested in my help...then shoot me an email and we can chat somemore about your needs and I can get you going in the right direction.

0 votes Thank Flag Link Wed Jan 20, 2010

I recommend going to a correspondent lender as he has the better rates than a broker or big bank. They will also have much more flexibility and speed in service. The bog 3 are not known for the most experienced Loan Officers and their service. As for going with an FHA loan, you are required to put a minimum 3.50% down payment/ investment. Your next step is to get in touch with a lender that you personally like for various reasons and get pre-qualified and pre-approved. We are a national correspondent lender and would be honored to provide you with some advice. Let me know if our team can help.

Good luck,
Ted Canto
Direct 888.724.7402
0 votes Thank Flag Link Wed Jan 20, 2010
No - One has nothing to do with the other. You may get a better rate at a Broker, but you will get a better response from the Listing agent with a Bank.

Either way - get recommendations for 3 different reputable lenders and call all of them. Whomever you best connect with may be your best bet.

Good luck!
0 votes Thank Flag Link Wed Jan 20, 2010
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