Home Buying in Pinole>Question Details

Johnsaldivar, Home Buyer in 94564

My wife and i have been pre approved through a broker for an FHA loan for 350000 at 5.75%, I heard it is better if you shop around for a better loan,

Asked by Johnsaldivar, 94564 Tue Mar 29, 2011

was thinking of doing this online , is there any websites that you recommend to get pre approved. Lending tree, Quicken ect...

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Here's youur answer regarding effect on your credit score when you inquire

http://www.myfico.com/crediteducation/creditinquiries.aspx

What to know about "rate shopping."

Looking for a MORTGAGE, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring.

So, if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. In addition, the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span.

Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.
1 vote Thank Flag Link Tue Mar 29, 2011
Gregorio, I was just referring to what you mentioned a couple of emails ago;

"If I charged a 1% origination fee that would still leave $11,500 credit for closing costs."
0 votes Thank Flag Link Tue Mar 29, 2011
"PS: Gregory, So now that you are getting paid (and I am glad you do because you seem to be putting a lot of energy and excitement into your work) the credit for closing costs to the buyer, for a 5.125 % rate, will be $11,500 and no longer $14,000. I am glad you clarified that"

PS, my name is Gregorio, not Gregory; attention to detail is a skill a loan officer should possess.

As for the credit; you are still wrong. The credit is $14,000. It's disclosed as $14,000 on the GFE, it's disclosed as $14,000 on the HUD... why... because it is $14,000.

Have I mentioned that All YSP is credited to the borrower?

On topic:
5.75% is too high
5.125% is still too high
And $14,000 credited to the borrower, is $14,000 credited to the borrower. Its' not $11,500 because there is a $3500 origination fee just as it would not be $10,750 if you include a $750 escrow fee. It's still $14,000 that the borrower uses to pay settlement fees. I am baffled at why you don't understand the concept of a credit being used "to reduce settlement charges",

I suggest that if 15 months in, you still don't understand RESPA, you will have serious difficulties come 4/1/11 at 12:01AM because it's obvious you have no understanding of disclosure.

I can only wish you luck.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Tue Mar 29, 2011
John, your broker should have access to the same rates as we all do and I stand by the fact that you should be able to get 4.750 - 4.875% with no points

PS: Gregory, So now that you are getting paid (and I am glad you do because you seem to be putting a lot of energy and excitement into your work) the credit for closing costs to the buyer, for a 5.125 % rate, will be $11,500 and no longer $14,000. I am glad you clarified that
0 votes Thank Flag Link Tue Mar 29, 2011
Your agent should have given you, at least, the names of 3 mortgage Broker/Lenders for you to talk to and see who you feel comfortable with.

Start with your credit union (if you have one), then off to bigger names... Citi, Bank of America, etc.

Should you need some more help, I will be glad to help.

Debbie Henninger, REALTOR
Keller Williams Realty
0 votes Thank Flag Link Tue Mar 29, 2011
"So if 5.125% is at 104.00. and you refund 4% then how do you get paid unless you charge point(s) for your services?

If you do charge point(s) then mention it ."

Are you serious?
Have you done a GFE since 1/1/2010?

GFE 2010 page #2 Line #2 box #2 would read as follows:

You receive a credit of $14,000 for the interest rate of 5.125%.
This credit REDUCES your settlement charges.

In case you have been asleep for 15 months, YSP is disclosed as a credit to the borrower that offsets closing costs. If I charged a 1% origination fee that would still leave $11,500 credit for closing costs.

I'll say it one last time for you. At 5.125%, the credit would be too much as there are not enough closing costs. The borrower would end up getting money back which is not allowed. The only solution is to either charge an enormous origination fee to absorb it, or to offer the consumer a rate, as I stated in my original post: "from this planet.

I sure hope you are joking.
0 votes Thank Flag Link Tue Mar 29, 2011
Hi John, Online is not the answer. Your agent should be able to give you several names of mortgage officers. If she can't ask your friends who they used. The rate seems high to us at this time. If all else fails call some of the local banks or credit unions to see what they say. 5.75 right now seems high compared to what my buyers are being quoted, and they're using Wells Fargo and Flagstar. Good luck and happy home hunting!
0 votes Thank Flag Link Tue Mar 29, 2011
So if 5.125% is at 104.00. and you refund 4% then how do you get paid unless you charge point(s) for your services?

If you do charge point(s) then mention it .

I do stand to the "With No points, you will be looking at 4.750 - 4.875%..."
0 votes Thank Flag Link Tue Mar 29, 2011
I will also add that for those that say there may be other factors affecting the rate, they obviously don't understand FHA pricing. There are no other factors that would affect a standard FHA 203b rate other than credit score. LTV, income and assets are irrelevant to pricing. If they qualify for financing , they qualify for the rate. There are no adjustments that would get anyone to 5.75% as of today. No way, no how!
0 votes Thank Flag Link Tue Mar 29, 2011
In response to :

"Don't be lured by people that tell you that they will refund $14,000 on a 5.125% because they either do not get paid or will have to charge you point(s) for their service. "

First of all, I don't appreciate the insinuation. Secondly, on my rate sheet as of 3/29/2011, 5.125% is at 104.00. That means that per the GFE 2010, It would show a $14,000 credit as ALL YSP is credited to the borrower. This credit would be used to offset title, escrow, origination and all closing costs.

If someone does not understand how to properly disclose this then that's a serious issue.

My point was that even 5.125% would actually be TOO HIGH and there would be TOO MUCH rebate. I don't "lure" anyone, I speak FACTS and the FACT is that 5.75% with a 640 on an FHA loan as of today is ridiculous. 5.125% is equally ridiculous.

As for this comment: "With No points, you will be looking at 4.750 - 4.875%..."

I strongly suggest someone find better sources, I clearly see 4.375% at par with a 640 on a 30 year FHA loan.
0 votes Thank Flag Link Tue Mar 29, 2011
John,

If you'd prefer to watch a short video that explains how credit scores work with the mortgage process, you can click on the link below. It's important to shop for the best rate, and more important to know how to best do that.

Thank you,

Rob Spinosa
rspinosa@rpm-mtg.com
0 votes Thank Flag Link Tue Mar 29, 2011
John, I answered your question on Zillow as well and see you have more detail here.

If I have it correct you say your agent referred you to a lender that is quoting 5.75% and you are considering offering to purchase a home that is $50k to $70 overpriced? And you are concerned about "stepping on toes" if you raise these issues with your agent?

Forums like this are difficult to get all the facts out into the open and there may be a very viable reason why you are being quoted the 5.75% (maybe that's just the rate the Loan Officer stuck in to get you pre-approved) and maybe your agent will tell you not to make that overpriced offer. Or maybe the home really isn't overpriced.

In any case you have every reason to have doubt in the professionalism and knowledge of the people you have working for you right now. You need to have clear and detailed conversations with both the agent and the loan officer and see what they have to say.

I've always advised the agents I work with to pay attention to the answers from the loan officer - if they are specific and they don't waffle they are probably telling the truth. If the answers are vague and don't make sense then it's possible they either don't know what they are talking about or they are not telling the truth.

You certainly don't owe either the agent or the loan officer any allegiance if they have not been honest and ethical in their dealings but I'd encourage you to have a heart to hear conversation with them both before you just cut them loose.

Good luck and feel free to post back with any follow up questions.
0 votes Thank Flag Link Tue Mar 29, 2011
John,

With No points, you will be looking at 4.750 - 4.875%...

Don't be lured by people that tell you that they will refund $14,000 on a 5.125% because they either do not get paid or will have to charge you point(s) for their service.

Good luck.
0 votes Thank Flag Link Tue Mar 29, 2011
Hi John,

I answered this question for you on Zillow as well. I dont think it's wise to sign up for these sites you mention as they will run your credit several times without asking. If you wish to shop around, go to major banks and see what they have to offer. Once you are happy with your loan package, I would be happy to assist you in finding a home of your dreams :)
0 votes Thank Flag Link Tue Mar 29, 2011
With a 640 credit score, there is absolutely no reason you should have a 5.75% rate. My rate sheet doesn't even go that high. The highest I have is 5.125% and even at that rate you would get a $14,000 credit towards closing costs.

Find a new lender or have them quote you a rate from this planet.
Web Reference: http://TripointMortgage.net
0 votes Thank Flag Link Tue Mar 29, 2011
John,

You have it right, a lower rate will help you qualify for a higher loan amount;

$350,000.00 loan amount @ a rate of 5.750%, 30 yr Fixed Mortgage , = $2,042.50 (principal and interest)

$385,955.00 loan amount @ a rate of 4.875%, 30 yr Fixed Mortgage , = $2,042.50 (principal and interest)

Good luck,
0 votes Thank Flag Link Tue Mar 29, 2011
The friend of the family is the Realtor, and she uses the broker that us our quote. Since this is our first home we we to her to help guide us through everything. She never did mention anything about finding different rates, we have always assumed that the rate we were given is something we would have to settle on, so now that we have been shopping for some time and the homes available are the same ones we have been seeing for a while, we felt maybe we could work on getting a better rate in case we need to find something that may be a little more then we were willing to offer.
0 votes Thank Flag Link Tue Mar 29, 2011
John,

The lender's quote is about one (1) percentage point over today's rate for a 30 yr fixed FHA, WITH 0 POINTS.. For a $350,000 loan amount, amortized over 30 yrs, this represents a difference of about $200/ month.

Is the friend of the family, the Realtor or the Mortgage Broker?

Good luck
0 votes Thank Flag Link Tue Mar 29, 2011
John

Remember that your agent works for you, and should look out for your best interests. Your agent should be able to help you look around for the best rate if that's what you want to do....

If you don't have an accepted offer, then there won't be an appraisal (from you or your lender). Even if the seller did their own appraisal, your lender of choice won't use that appraisal for your loan.

Don't feel like you have to pay a higher price (higher than what?)....consider the current market value of the property. And again, your agent should be able to do the comps for you. It's part of what a realtor does for her clients.

Good luck!
0 votes Thank Flag Link Tue Mar 29, 2011
STAY AWAY FROM ON-LINE LENDING!!!!!!! IF NOT, YOU'LL BE SORRY!

BTW, you are not going to much variation on an FHA loan. They are pretty consistent.
0 votes Thank Flag Link Tue Mar 29, 2011
My credit score is close to 640 and my wifes is about 725, We have found a property that we like , it is new on the market , and we have asked around and is currently 50-70 thousand over priced, We have not made any offers but have talked to there agent and have a feel for the buyer since we have met her prior to selling. We are currently on contract with an agent, and she is a friend of the family which makes it difficult for us trying to shop around since we dont want to step on anyones toes. The property has not been appraised. The home is in the location that we want and this is the only main reason we would pay a higher price if necessary. there are only a hand full of properties available in this area of Pinole since we have been shopping.
0 votes Thank Flag Link Tue Mar 29, 2011
WOW never shop online based on number of scams. Each credit pull lowers your scores. Best contact a broker direct , I don't believe be much difference in the rates.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Tue Mar 29, 2011
Johnsaldivar,

What is your credit score right now?

Have you found a property?

Are you in contract?

If so, when do you need to close?

Has an appraisal already been done?

Cheers,
0 votes Thank Flag Link Tue Mar 29, 2011
If we decide on doing some shopping around, do you know if this will hurt our credit score at all, since we have a loan now, I know we wold fear losing it if our scores had dropped from shopping.
0 votes Thank Flag Link Tue Mar 29, 2011
You won't get personalized customer service with the online brokerages. Get a Good Faith Estimate from the current lender and then get a second Good Faith Estimate from other lenders. It's OK to check with the seller's lender as long as you tell you agent you want to see what their lender can do to get the rate a little lower. Every borrower's situation is unique as far as their credit score, their income to debt ratio's etc. Investigate and find out everything about your particular situation.

~~~
0 votes Thank Flag Link Tue Mar 29, 2011
If you're working with a realtor, ask your realtor for some suggestions in terms of working with a lender with whom you can have a face to face meeting, someone you can get hold olf even after hours. Getting prequalified/preapproved by one of these online companies may sound easy, but when it comes down to the actual process, it becomes a challenge such as:

1. Selection of an appraiser (will they choose an appraiser who is from the immediate area, or from several cities, even counties away?). An appraiser unfamiliar with the area may come up with a questionable market value

2. If you need to get hold of the lender when questions/problems arise, do you have to go through a phone menu, is the lender in the same state or time zone?

I've had two clients who applied online (one of them with Quicken Loans), and both times, the process was horrendous for the reasons just mentioned. Many realtors will likely suggest that you use local lenders. You can shop around just as easily. Ask your realtor for suggestions.
0 votes Thank Flag Link Tue Mar 29, 2011
I used amerisave a few times, very very competitive. Aimloan is not bad. Check bankrate.com for quick comparison.
0 votes Thank Flag Link Tue Mar 29, 2011
Johnsaldivar,

The rate is high for a conforming 30-year fixed rate FHA loan.

Feel free to email or to call me for a quote.

Thierry

Thierry Abel
Senior Loan Consultant
By Referral Only
All California Mortgage
P: (415) 464-8261
C: (415) 378-7508
F: (415) 464-2367
E: tabel@allcalifornia.com
NMLS 304353 - DRE 01380701
0 votes Thank Flag Link Tue Mar 29, 2011
You can use whatever lender you choose and your agent should understand if you find a better rate with someone else. I agree that 5.75% sounds high for an FHA loan right now. If you want to use the lender that the listing agent recommends that's fine. Your buyer's agent may have another lender they can recommend to you as well.

If you want to talk to a great lender, try Celeste Anderson at RPM Mortgage. Her office number is 925-295-9339. She's the person I refer my clients to.
0 votes Thank Flag Link Tue Mar 29, 2011
We kind of have a home in mind and the real estate agents selling the home uses a different broker, do you think it is worth asking them there rates, or is that wrong since we are using our own real estate agent. Sorry this is all new to me and I am trying to learn all that I can before I make the final decision, and we want the best deal we can find.
0 votes Thank Flag Link Tue Mar 29, 2011
I would definitely shop around. You may have gotten the best rate and terms based on your circumstances, but you won't know that until you speak to a few different lenders. I actually think it's better to speak to specific home mortgage lenders, whether that's direct lenders or mortgage brokers, who are relatively local so they understand your market and potential issues that could arise too. Good luck.
0 votes Thank Flag Link Tue Mar 29, 2011
Yes you should definitely shop around for your loan to make sure you’re getting a competitive rate and terms. That interest rate sounds high to me. If you are not already, you should be working with a buyer’s agent to help purchase your home/condo and hopefully they work with some trustworthy lenders that they could recommend to you. I would be happy to recommend a couple lenders to you that you can call |direct lender and a mortgage broker|, so at the very least you have something to compare to. Feel free to email or call me and I will pass their information to you.

Click on my web reference website to get my contact info for me to pass along the info to you..
0 votes Thank Flag Link Tue Mar 29, 2011
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