House Buying/Mortgage Questions

[alingo2001]

I have successfully gotten a contract on a house to be built. Will be finished late July or early August. My realtor referred me to his mortgage guy. Process is going fine but someone said it wouldn't hurt to see other options. I have started the process with Rocket Mortgage/Quicken. 

Much easier to deal with. She's telling me rates are around 4.25 right now and she has convinced me to go Conventional rather than FHA because I've got pretty good credit and it's not that much more of a down payment...5% vs 3.5% with the FHA. 

The other mortgage guy is telling me the rate will be near 5% with the FHA loan and is just harder to deal with/get a hold off. He's someone local. 

Am I wrong to try and find the best deal? It seems like Rocket Mortgage may be the way to go. My realtor called saying the listing agent got a request for the contract. 

Any other advice would be appreciated. I did offer $5000 more to have the builder pay that amount towards closing also.

[Jeb48]

Have you tried walking into your regular bank and asking for a mortgage? I applied at a credit union and a bank when we bought this place 3 years ago and both offered me a good mortgage. At the time I didn't have an account with either. The credit union was where I planned to do my banking and have, but actually got the mortgage with the bank. They had a .25% better deal on a 30 year mortgage.

[jpx2rk]

It's been a while since I applied for a mortgage, but since you say you've got "pretty good credit", it would not hurt to talk to several different and LOCAL lenders to see what they offer.  If you know your FICO credit score (available from several sources), you can provide that to the lender during the initial discussion.  They can then give you some idea of what they would offer in terms of interest rate and terms.  You don't have to go 30 yrs, you can go shorter and the rates will be different for each length of the mortgage term.

Use some common sense and ask lots of questions.  It is a complicated process, and you will have to jump thru many hoops, but a local lender can be easier to deal with in person/face to face than someone on the phone 3 states over.

[alingo2001]

Credit is right at 725 so I think it's pretty good.

[MPGlock]

Totally agree with the stay local part if you can. It’s a very big help


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[Murgatroy]

When we bought our house we stayed local. I shopped around a little bit, but only three places if I recall. The first (Quicken) was just to feel it out. I had a great credit rating (760+) and things went very smooth for us. We wound up with a <3.5% loan. The important part was to be realistic. We were approved for well over double what we paid for our home (that appraised for $40k over what we paid.) I wanted to keep my payment at a certain point. Even though we were approved for MUCH more, I didn't way to pay MUCH more on my mortgage over what I was paying for rent. To be honest, that was my biggest factor/concern. I see too many people get in trouble because someone told them they could afford a $2200 a month mortgage payment when they are used to paying a $700 a month rent payment.

 

Also take into account that with taxes and insurance fluctuating, even if you have a fixed rate/term loan, your payment can change by +-$200 a month at any given time. This has also taught me the value of shopping my insurance, which has changed three times in as many years.

Also, not sure if you are current HO, but take into account the cost of maintenance of owning your own home if you haven't already. That is another easy $1000+ a year I didn't take into account, even though I was thinking I was.

[peejman]

Definitely shop around. I understand the desire to "buy local", but mortgages get bought and sold every day. With things like a mortgage, a very small difference at the beginning can have a huge effect on the end.  Get the best deal you can, regardless of where it comes from.  Sometimes increasing your down payment can improve the loan terms. 

As mentioned, owning a house is expensive.  It's rare that anything significant goes wrong and doesn't cost $1000 to fix.  

 

[Grunt67]

By all means, shop around. A mortgage is no different than buying a car, prices vary.

And, as peejman said, just because you buy a mortgage local, doesn't mean it'll stay local.

Not unusual for a mortgage to be sold off, sometimes more than once.

Good luck, congratulations.

[Erik88]

Just keep in mind that by shopping around they will most likely do a credit check each time. This does impact your score. That being said, I definitely agree with the advice above. Shopping around is the smart thing to do. 

[seez52]

If you're dealing local and not getting good feedback or response rate, then you're dealing with the wrong local lender. I deal with three different lenders and all of them give 24/7 (nearly) responses. And that's to me as a Realtor, and to my clients. 

The online mortgage companies can be a hit or miss. They often give great customer service when you're inquiring, then once they have the loan you move on to a different department/person and response boggs down. 

Generally, I try not to deal with the online outfits simply because you can't count on them in what is a time sensitive situation. I've done it, but hold my breath every time.

[ReeferMac]

6 hours ago, Erik88 said:

Just keep in mind that by shopping around they will most likely do a credit check each time. This does impact your score. That being said, I definitely agree with the advice above. Shopping around is the smart thing to do. 

It's usually considered a 'soft' check, and does not impact your credit. Only when filling out the paperwork for the actual loan application, will it impact your credit.

 

Ditto shop around, never hurts to ask. One lender conversation may have a different tidbit of information, or different way of saying things, and help you get a clearer picture. Also rates may vary. 0.25% might not seem like a lot, but it will over the life of the loan.

You may be better off buying points, too.

Also make sure to add in any PMI (Private Mortgage Insurance), Home Insurance, and taxes to your 'payment' number. You can easily increase your monthly by several hundred dollars right there....

[Murgatroy]

As stated, we went local. Within weeks of closing we got a letter from Wells Fargo informing us they had bought our mortgage. There were no changes, just a notification that they now owned it. In the aspect of PMI, Insurance and taxes, my actual 'mortgage' is about $XXX a month. That sounds awesome, but after PMI, HO Insurance and taxes, we pay double that a month. It is still a reasonable payment, and our mortgage officer was easily able to 'ballpark' that figure for me once we had settled on a house/location and an estimate from the insurance company. As stated though, with tax changes and insurance changes, that has fluctuated, up and down, over the years.

[Sam1]

In a similar boat right now, put in an application on quicken to compare VA and conventional loans for a new place in Vegas.  Make sure to apply to multiple places.  You have a 14 day to 30 day window where you can apply for multiple mortgages and it only counts as one inquiry on your credit report later.  Think I have 5 in right now, and there are substantial differences between fees/points/interest rates.

Do not decide based on a single company's opinion.  Good thing is they all require basically the same info, so after you apply once, you already have all the documentation to send to the others.

Also... if you are buying new construction, and haven't signed with a realtor, check with the construction company, sometimes they will knock 2-3% off the house for not having to pay those fees.  The new stuff I was looking at in Vegas was 2% if I went through them, + 2% if I used their bank for financing.  Thousands $ saved right out of the gate, just by not getting a second realtor involved.

 

Edited March 29, 2018 by Sam1