GFE shown to us is different than the one we got in the mail. Is this normal for GFE to be different than what is presented or is this a red flag?

Asked by April Schmitz, River Falls, WI Sun May 16, 2010

Hello, We met with our lender to go over the GFE and the one we received in the mail is different than what we discussed. The lender said our loan had no prepayment penalty. I remember because this was very important to me becase our home we are purchasing is a duplex, so we were required to take a 6.8% loan in order to get financed so we were going to refinance in 6 months when we turn the duplex in to one home and have the rest of the 20% down.

Is this normal for GFE to be different than what is presented or should this be a red flag?

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, ,
Sun Jun 20, 2010
Ditch, maybe. Get a 2nd opinion, . . . definitely.
Web Reference:  http://www.charlesdailey.com
0 votes
April Schmitz, , River Falls, WI
Sun Jun 20, 2010
So last week I recieved a 6k raise. I asked our loan officer if this would help us qualify to get an ARM instead of a 6.8% fixed rate loan. He responded in a way which makes me think that he hasn't been honest with me. First he now says USB only requires us to qualify for 1% over the going ARM rate to qualify. This doesnt make sense because the reason we took the 6.8% fixed with the intentions of refinancing in 6months was because he told us we didn't qualify for an ARM loan of 4.875%. So we should have been able to qualify for the ARM.

Secondly, when I asked him if he ran the numbers to see if we could now qualify for the ARM he said ""And, no. I'm not looking at your file until the roof is fixed. Once that's done I'll order the inspection (again) and then rework your file (again). With rates fluctuating a couple times a day I could approve your ARM today and not be able to when the inspection is done which is when I can resubmit the file under the ARM program."

I thought rates lock. And if he was able to unqualify us so easily at the beginning why cant he run the numbers now?

None of this makes sense. Since the sellers are still working things out on there end I am strongly considering going somewhere else for the mortgage. We now close on July 22nd.

Am I over thinking this? Or should I ditch this lender and go somewhere else.
0 votes
, ,
Mon May 31, 2010
OK. You're in pretty far with Bell and it may be the best course of action to close this out with them but something strange is going on here and your answers are not concisely being answered. So, as a courtesy, I'd be happy to serve as a sounding board for your questions and, if it ends up looking like things are really messed up, I'll take the loan over. But for now, stay where you're at with Bell, call me with questions and let's see if we can get your current loan process back on track.

Call me at 651-428-6968 (I'm working today because holidays are a great time to get caught up, . . . . and I'm a loser).
Web Reference:  http://www.charlesdailey.com
0 votes
April Schmitz, , River Falls, WI
Mon May 31, 2010
Also, Our credit rating is mid 700's if that makes a difference.
0 votes
April Schmitz, , River Falls, WI
Mon May 31, 2010
We are being brokered through US bank. We couldn't get an arm because we were told we would need to qualify to have 9% IR. New regulation for ARMs I guess. If you have a way to make it happen, we would love to talk to you. Our income is $80k and our monthly debt is $1185 (which includes the mortgage for our current townhome which we will be renting). Appraisal was done last week and came up 5k short. We are waiting to see if the sellers can come up with the difference...
0 votes
, ,
Sun May 30, 2010
Uh, . . am I missing something here? Why wouldn't you have your loan brokered through US Bank Wholesale's Consumer Finance Division on a 3/1 ARM in the mid to high 4's (with no MI at 90%)? Isn't Bell Mortgage signed up with them? Maybe they're not. If not, give me a ring. I'm right across the river from you.
Web Reference:  http://www.charlesdailey.com
0 votes
April Schmitz, , River Falls, WI
Tue May 18, 2010
Does it make a difference that the broker wrote a letter that he would waive the origination fee of 1% when we refinance?

If I could find someone who could finance this house with 10% down and a 5% APR that would be my wish. Wellsfargo denied us once they found out the home was zoned a legal duplex. I don't know if we have any other options and our closing date is fast approaching (June 24th).
0 votes
Chris Richter, , Chicago, IL
Tue May 18, 2010
Hi April,

Congrats on the new addition.

If the person knows what you are doing and is charging you a point, you have a really bad originator. I don't agree with origination points in general as it is just added commissions to the broker. It's not good, but if you're in a loan for 10 years, it at least is spread out over a long time.

To pay a full point on a loan that you will only be in for 6 months, that makes that point a lot more expensive.

If you can save a point by making one or two phone calls, I'd do it.

That's just my $.02,
Chris
0 votes
, ,
Mon May 17, 2010
Hi April,

A conventional loan is going to have the same requirement as FHA when it comes to using the rental income from your current home to offset your existing mortgage payment.
0 votes
April Schmitz, , River Falls, WI
Mon May 17, 2010
Hello,

We are moving because of a recent addition to our family. We have simply outgrown our 2 bedroom town-home. We qualify in this sense however we do not meet the other criteria (must have first mortgage paid down 75%). Our current home is underwater due to the market.
0 votes
, ,
Mon May 17, 2010
Hi April,

I went through some of your other questions so I have a better understanding of what you're trying to do.

Have you looked into a USDA loan? I know you own another home with an FHA loan on it so what is the reason for your move? The reason I ask is because FHA does have exceptions which will allow a person to have more than 1 FHA insured loan at a time.
0 votes
April Schmitz, , River Falls, WI
Mon May 17, 2010
We are going through Bell Mortgage. He took off the Prepayment Penalty and thanked me for catching this. The reason for the 6.8% is there is no PMI and the fact that we don't have 20% to put down on a duplex, which most lenders won't give you a loan for a duplex unless you have the 20%. Closing costs are a little over 4% (Origination is 1% and not negotiable he said).
0 votes
, ,
Mon May 17, 2010
Hi April,

The GFE can change if you do not "accept" the terms within 10 days of the lender providing it or if there is change of circumstance but that's it.

The more troubling thing to me is the interest rate of 6.8%. What lender is quoting you this rate? The highest rate I have from any of my lenders is 5.625% for a conventional 30 year fixed and as low as 4.5%. Is this a jumbo loan?
0 votes
Keith Manson-…, , Milwaukee, WI
Sun May 16, 2010
From my understand the GFE is the controling document. If you have issues with the document contact lender. I have attached the document that tries to address typical questions people have about good faith estimate and maybe this will help answer more of your questions.

http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs422010.pdf

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee

http://www.milwaukeebailout.com
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