Author: diddlydudette
Posted: Tue Oct 18, 2005 12:04 pm
Post subject: Tips for Getting Your First Mortgage I've finally gotten a realtor and just got pre-qualified for loan this weekend. I saw a house I'm interested in and she and I are going to look at that house tomorrow morning.
I talked to a couple mortgage people this weekend and had gotten some good faith estimates from another mortgage person a while back.
Are there any scenarios I need to beware of when deciding on which mortgage to go with? I'm first time home buyer with excellent credit.
I'm looking at about 125,000 mortgage and can put down 10% and would prefer no PMI. One mortgage guy said we could run numbers and sometimes it comes out better if I pay PMI...i.e. getting 100% financed. Is 80/20 good? How about 80/15/5%. I'm hoping to get a mortgage of no more than 850 a month. Is it looking good? I'm having one of the guys write me up some good faith estimates of different scenarios, but I hadn't heard back from him yet.
Author: scarymary
Posted: Tue Oct 18, 2005 1:14 pm
Post subject: Tips for Getting Your First Mortgage As a Realtor, I've seen and heard horror stories of people using unguaranteed lenders to fund their home purchases. Who are these "mortgage guys"?? That is what you have to ask yourself.
Do they guarantee funds at settlement?
Do they guarantee the wire transfer will be on time?
Will your "Mortgage guy" be at settlement with you to hold your hand and explain all the docs?
I can't stress enough... STAY AWAY FROM ON-LINE LENDERS! Not those with local offices, but the ones that are only online that promise 1% with no PMI... blah, blah, blah. They are bait and switch companies that don't come to settlements and cannot fund your loan for some ungodly reason while your sitting at the table and the moving van is sittting waiting to unload at the new house. Like Bob's Mortgage Company. Would you go to Larry's Dental Lab or Franks Surgical Center? NO! So you shouldn't settle for some run of the mill companies that can't deliver what they promise.
Payments, rates and PMI is only the half of it. What good is an excellent rate if the money won't be at the closing?? Verify that you have a reputable "mortgage guy". Even referrals can be sticky. Most likely, it's best to use the in-house company that your Realtor may have. They will usually guarantee that your money will be available. I always insist that my buyers use a reputable company and have even turned down working with clients because they "got this great rate from Mortgage Warehouse on the internet." They always fall thru and they always come back to me and ask me what to do this time so they actually settle. That way, I get to be the hero instead of the dog.
Regarding what you wrote, PMI is mortgage insurance that is not required to be paid if you put down 20% or more. how on earth could your situation be better paying PMI? That statement right there raised a red flag with me. And financing 100% is only for those that do not have the funds available to put money down. Heck, I've even seen people finance their closing costs!!!
My suggestion is... put down as much as you can without leaving yourself cash poor. $10K total closing costs (including deposits) is a fair expectation on a house worth $150k or a bit higher in my area of PA (just outside of NE Philadelphia)... including appraisals, inspections, taxes, insurance, etc. And make sure that you only buy what you can comfortably afford.
In simpler terms, if you have a roof over your head, can you afford to eat and wear shoes also... or will one of those things have to suffer? If one must suffer, it's too much house for you.
You asked what you should beware of... just pay attention. You will have a nice, smooth transaction if you just make good choices and don't be swayed by a lower payment or interest rate that "just doesn't seem right".
Also, pre-approvals and pre-quals are different. Pre-approvals require your signature so the lender can run your credit to determine what rate range you qualify for. pre-Quals are basically only saying, I make this much, owe this much so this is how much house I can afford. They are not worth the paper they are written on.
By the way, no lender can give you a good faith estimate "in general". They can only give you accurate numbers when they at least know what area (neighborhoods) you are looking in... sad but true.
Author: diddlydudette
Posted: Tue Oct 18, 2005 6:11 pm
Post subject: Tips for Getting Your First Mortgage That's cool that you are realtor.
Actually my Finance guys work with my realtor. The guy I feel most comfortable with is Prudential just as my realtor. He's been very patient with me and my tons of questions. He's explained quite a bit and I've leaned a good bit, but I'm still ignorant on a lot too. When I decide to fill out a contract I will have him do a good faith estimate or whatever and have my sister (realtor in another city and her mortgage person) review it just to be on safe side.
The house I saw on internet that is really nice is going for 127,500. Mortgage man estimated my closing on that to be about 3,700. He said rarely do you pay asking price. If you do, you can ask seller to pay closing.
He also said that really my excellent FICO score doesn't really give me a better rate, it just gives me a lot more options. If I had bad FICO, I'd be hurt, but he said I'm good to go and can name my option.
I told him I was looking for no more than 850.00 mortgage payment. I think we were on phone for at least an hour as he explained things. I'll be completely honest and put it all out there.
I have 25,000 is savings. I make about 40,000 a year. I have no debt. I have a cash back credit card but pay it off each month. I really wish I could put 20% down and have no PMI, but I don't want to deplete my savings so I told him I feel comfortable putting at least 10,000. Then he said I could finance rest at 6.38 (with no PMI) and my mortgage would be about 840.00 a month including insurance, etc.
If I put down 10,000 and have PMI and a rate of 5.75 (I think that's what he said...I could be wrong but it was 5 point something) then my mortgage would be about 825.00 a month.
I asked about 80/15/5 and 80/20 but dont' like having that floating/prime rate loan. I don't want any surprises so really want fixed. He agreed with me and said in my case that would be smart.
Here's a link to one of the house I'll be looking at tomorrow. This is one if five, but my favorite.
http://www.marciahoward.com/moredetail.cfm?id=1097034&AllowZooming=false
This would be my first house ever and it's so exciting.
Anyway, do these loans sound about right and about best I'll probably be able to get. I just don't want to have any regrets or do anything dumb being so green on all this so am asking for everyone's advice, including y'alls (the experts).
P.S. Would it be smart if I asked the seller to pay 1/2 the closing costs and then perhaps go down in price of home maybe 2,500? I could go ahead and pay my half of closing cost and then get my mortgage even a little cheaper. Would that be wise or just get them to pay all closing and keep price of home the same? I'll also ask realtor tomorrow her views of course. Who knows, I may end up hating all the houses I look at.
Author: scarymary
Posted: Wed Oct 19, 2005 8:09 am
Post subject: Tips for Getting Your First Mortgage First of all, I'm not surprised you said that you felt comfortable with Prudential. Here is my website... see who I work for!!! www.billandvaleriecancel.com You can also check out the calculator sections on my site.
Second... in PA, sellers do not pay the closing costs of buyers. The only thing we have in PA is sellers assist... which means they negotiate out a $$ figure if the buyer is short on cash just so they can close. It has nothing to do with if the buyer is paying full price or not (usually only done in the city, Philly). If the buyer pays a higher price, he has higher costs... end of story.
BTW - Quote:
He said rarely do you pay asking price. If you do, you can ask seller to pay closing. It seems strange for the mortgage guy to be telling you this... easy rule of thumb... each party should know it's place... Realtors sell homes and lenders do the financing. She'll tell you what to do and he'll tell you how!
If your Realtor tells you to offer full price because that is what the market is determining and you don't want to lose the house... do it... if you can afford it.
Also, it's important to remember that closing costs and payments vary because there are too many variables to give you a solid number before closing. Insurance costs vary... taxes... even notary fees. I always figure higher than I expect by a few bucks so my buyers always have enough money to close and usually get a check back at the table.
Well... use those calculators on my site and it sounds like your on your way. This is supposed to be a fun, exciting time... not stressful. So enjoy it!
