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Thanks for the tips. We want a 30 yr fixed interest rate loan, we'll be putting 20% down, prefer to not pay points. You were right; my credit union's rates are pretty close to what Freddie Mac has posted (0.5% higher). I think when the time comes (we're shooting for October) I'll compare options between a broker and my credit union.
It's crazy when I see what some places are charging. So, when you check w/ places - make sure they tell you all their little fees up front. You don't want to find a house and get a huge suprise the day before closing. Ask your friends or your realtor for a Lender referral. Somebody surely has had good luck w/ someone before. A co. that does things "in house" also helps speed things along and sometimes keeps the costs down. However those are few. And - w/ you putting 20% down - you should be a lender's dream client right now....as long as credit it good too. October will be here before you know it! Good luck w/ everything!
It's crazy when I see what some places are charging. So, when you check w/ places - make sure they tell you all their little fees up front. You don't want to find a house and get a huge suprise the day before closing. Ask your friends or your realtor for a Lender referral. Somebody surely has had good luck w/ someone before. A co. that does things "in house" also helps speed things along and sometimes keeps the costs down. However those are few. And - w/ you putting 20% down - you should be a lender's dream client right now....as long as credit it good too. October will be here before you know it! Good luck w/ everything!
Not as crazy as that top line on the HUD that shows the agent commission!! $21,000 fee!????? (6% on a sale of $350k) PLUS an admin fee...ouch
Thanks for the advice on points, which is a little confusing to me. We aren't planning on refinancing in the future and we plan to stay in our home for ideally at least 8-10 years if not longer. I'd like to pay points, get a lower rate, and have a lower monthly payment, but realistically I am not sure if we'll be able to pay for points after putting 20% down + closing costs + needing to have some money set aside for emergencies and whatnot. But houses in my area appear to not be selling quickly, so it's possible we may get a good deal and have more money on hand to pay points.
I really appreciate all the help and advice!
Thanks for the advice on points, which is a little confusing to me. We aren't planning on refinancing in the future and we plan to stay in our home for ideally at least 8-10 years if not longer. I'd like to pay points, get a lower rate, and have a lower monthly payment, but realistically I am not sure if we'll be able to pay for points after putting 20% down + closing costs + needing to have some money set aside for emergencies and whatnot. But houses in my area appear to not be selling quickly, so it's possible we may get a good deal and have more money on hand to pay points.
I really appreciate all the help and advice!
You may have another option available to you regarding your overall down payment and how to cover the cost of points. Let's say you're buying a house for $90,000 but it actually appraises for $100,000. This is common in this market, and opens up an opportunity for you. This will make sense to any selling agent, and with some explanation the seller should get it. The seller is expecting to get $90,000... let's say you raise the sales price to $95,000 instead of $90,000. At this point the seller can do a "sellers concession" to you for $5,000. This means the seller still gets that $90,000, but it allows you to finance an additional $5,000. You would use this money towards closing costs, in essence giving you more buying power to buy your rate lower. This is a simplistic example, and keep in mind when bumping a price with your scenario you can only get 80% of the sales price as you do your loan... so it will have a small increase on your down payment, but you will gain money overall to be used for costs. Also, be careful not to inflate the sales price too high, as a lender will not allow you to get cash in pocket at close. The only time this comes into play is when you're buying $350K+ with a big concession.
The negatives towards doing this are minimal. The first is you bump your property tax implication by a very minor amount by kicking up the sales price. The other negative is that you are financing your closing costs (the amount of the concession), so you will end up paying double-triple that amount in interest over the long run. However, if you use this to buy down your rate, your overall savings will far outweigh the small extra amount financed.
You may have another option available to you regarding your overall down payment and how to cover the cost of points. Let's say you're buying a house for $90,000 but it actually appraises for $100,000. This is common in this market, and opens up an opportunity for you. This will make sense to any selling agent, and with some explanation the seller should get it. The seller is expecting to get $90,000... let's say you raise the sales price to $95,000 instead of $90,000. At this point the seller can do a "sellers concession" to you for $5,000. This means the seller still gets that $90,000, but it allows you to finance an additional $5,000. You would use this money towards closing costs, in essence giving you more buying power to buy your rate lower. This is a simplistic example, and keep in mind when bumping a price with your scenario you can only get 80% of the sales price as you do your loan... so it will have a small increase on your down payment, but you will gain money overall to be used for costs. Also, be careful not to inflate the sales price too high, as a lender will not allow you to get cash in pocket at close. The only time this comes into play is when you're buying $350K+ with a big concession.
The negatives towards doing this are minimal. The first is you bump your property tax implication by a very minor amount by kicking up the sales price. The other negative is that you are financing your closing costs (the amount of the concession), so you will end up paying double-triple that amount in interest over the long run. However, if you use this to buy down your rate, your overall savings will far outweigh the small extra amount financed.
Also add in the fact that any points you pay are 100% tax deductible in the year you incur the fee. As a bonus...YOU GET THIS DEDUCTION EVEN IF THE SELLER PAYS YOUR POINTS!
I agree with Jeff (again ). If 20% down plus costs is going to deplete your cash too much to buy the rate down by paying points...Have the seller pay 1% or 2% toward your closing costs. The seller will do this because this amount will just be built in the sales price.
Just a note about the benefit of using a credit union is that they often service the loan themselves. My loans with credit unions have never been sold off to other companies but the one home loan I got through a commerical bank was sold 3 times in the 3 years I had the loan, which was a pain during the transitions.
credit unions generally use mortgage companies. they dont fund the loans themselves, and this is why most of them get sold off.
it doesnt matter who you get the mortgage with....it can be sold at any point or time. You will see this disclosure at closing.
Quote:
Originally Posted by jb124
Just a note about the benefit of using a credit union is that they often service the loan themselves. My loans with credit unions have never been sold off to other companies but the one home loan I got through a commerical bank was sold 3 times in the 3 years I had the loan, which was a pain during the transitions.
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$21,000 fee!????? (6% on a sale of $350k) PLUS an admin fee...ouch
