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 Sam
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livinginnky
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evolovik26
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Posted: Mon Oct 01, 2007 9:27 am Post subject:
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agree with livinginnky completely
Above everything else look at the bottom line!
I ve been doing this for a long time and there are ways to hide costs and make it look good but the math doesnt lie. Get a Good Faith Estimate and make sure you compare the whole loan not just rates. Look at 4 values first: loan ammount, rate, payment , closing costs. If someone claiming lower closing coststs at the same loan ammount, rate, payment then you good but if something is off then you need to find out. Also make sure to ask what kind of loan it is when is it going to adjust? is there prepayment penalty? is it interest only? what is the term of the loan?
All of thouse can have effect on your numbers.
As far as the above questionair well im not sure all of thouse are important or can all even be answered by a lender. And alot can create more questions.
Information about Lender:
Does getting a good interest rate depends on excellent credit rating? Too unspecific.
Not really but it is important in the scheme of things.
What are the different steps involved in the process of pre-approval? Too much information.
Well I create a scenario based on what you have told me, the information you have provided me, along with your credit report and run it through pricing engine or present to the acoount executives so that they can give me general idea of whether this scenario is possible and at around what interest rate. Then i rely all this info to the client and present as options. Of course all the options are subject to change based on validity of the information provided. ect ect ect
How much time will it take to complete the process of pre-approval? Too general.
Depending on a loan scenario, lender, broker, information on hand, time of day, ect. anywhere from 30 mins to 3 days.
Is it allowed to Lock-In the interest rate while buying a home? Not clear enough
Yes its allways allowed to lock the rate but you need to make sure you are going to buy the home within the time frame of the ratelock.
Till what time is the Lock-In best for? Too general
As much time as nessesary to complete the transaction.
Till what time is the Lock-In best for? What does this mean?
What will happen if the interest rate goes down before a deal is closed? Lender/Broker specific
Most cases any variation of under .5% nothing will happen the rate lock means its locked and therefore will not change whether interest rate will go up or down.
Another thing that any borrower should understand is that "rate going up or down" is wrong way to discuss any mortgage situation. There are hundreds of different rates out there and hundreds of factors bring them up or down all the time. And there is nothing to say that your lenders rate whent up or down unless you know specifics of the deal.
Deal in terms of what is competitive, who you trust, and what you can afford and dont worry about world market.
After approval of a loan, will you provide a written commitment? Why is this important?
Yes most lenders will provide a written commitment but it will be subject to change and will carry no legal power for you whatsoever. The only good use for it is to give to your realtor so he can go find a house for you. There are no absolute guarantees in mortgages especially these days. Untill the underwriter has given a clear to close you have nothing set in stone. Everything is approximation.
What are the documents needed at the time of loan approval? Good question
Even though alot of different loans require different documentation it is very helpfull to know what is required or will be needed. Typical list for a regular full doc loan is as follows:
Copies of 2 forms of ID for all borrowers. (for idenification purpouse)
Copy of the Declarations page of your insurance policy (need to have insurance)
Filled out sighned 1003 (standard home loan app form)
Sighned Good Faith Estimate (doesnt obligate you to anything just signifies that you read and understood what is being said)
Sighned Truth in Lending Disclosure.
Borrowers authorisation (allows lender/broker to do aloan for you)
Number of other disclosures (whatever is required by specific loan and the lender)
Copies of W2 forms for the last 2 years or taxes if self employed.
Copies of the last 2 paystubs for each borrower.
Copies of last 2 month personal bankstatements
Copies of financial statements of any assets that you may need to show as assets such as 401k, stocks, bonds ect.
Award letters for pension, ssi, child support, ect.
Your credit report (will be pulled by lender)
How much time does a loan takes to get approved? Generic question
Most people dont understand what they are asking when they ask the question. Alot factors come into play: what kind of loan it is, how long will it take the client to get their documents, is it refi or a purchase, what are the lenders turn around times, when the appraisal is going to get done, are there problems on title, what othere documents the underwriter will ask for. Typically a loan will take 2-4 weeks to get done but there are alot of factors to consider.
How long will it take to close the loan after getting approved? Not a nessesary question
3-5 business days typpically but some things can stall the closing
About Loan Process:
If needed, can you process the loan faster? Bad question
Any loan broker/officer will want too close the loan as soon as possible but some things are out of our controll. We can push the lender in some cases but that can create poblems. Understand that we dont get paid untill the loan closes and are just as interested in closing your loan as you are.
Where is the mortgage loan processed? Why whould a client need to know this? Wherever the loan processing center is. While some process inhouse and this speeds up the process most lenders/brokers utilise fax/email/overnight mail to get things done eficiently.
What is the total time required to process a mortgage loan? Bad question
As long as it takes. There are too many factors that affect the tiem so its hard to tell.
Can the Lock-in also be extended if closing gets delayed? Not nessesary
Yes, it can. You may have to pay a small fee for this and you can ask your lender/broker about that.
Are the latest updates on loan processing available? Not nessesary
Yes they are your broker/loan officer or the processor should be in touch with you throughout the process and keep you informed that is their job.
How long does it take to get a loan approved? See above
Analyze your Financial Situation:
Do you offer any special programs with lower interest rates or reduced closing cost for the first time buyers? Not a good question
What do you want the lender to say? No we dont? Everyone wil say yes. Better question whould be is are you FHA approved? And where can i look up that information for your company? (but make sure you know what FHA is and whether or not it will help in your situation)
How much of a loan amount can be borrowed on a mortgage? Not sure what this question is for
You should see what loan ammout you can qualify for or what is the highest posible loan to value you qualify for. (this will determine your price range and how much equity/downpayment you need in your home.
What can be done to fix the past credit problems? too general
This will definately vary from person to person. Realise also that not all loan officers will know for sure what can be done and will likely know only general info.
What can be done to qualify for the required loan? Good question.
Because a loan officer directly interested in getting you a loan if for some reason you not qualify for one ask him questions about what he thinks you should do (make sure loan officer is knowlegeble and get a second oppinion b4 doing anything though)
References:
Can you give me the references of those people whose loans you have processed? Not a good question
Chances are no loan officer will want his clients bothered by someone else. And there are laws in place to prevent such an intrusion of privacy. So if someone is willing to answer reference questions then its a personal friend who is not likely to provide you with objective information.
Points and Fees:
Is the originating fee a part of the closing costs? Get a Good Faith Estimate
Alot of people dont know what they are talking about when they inquire about any specific closing costs. Yes origination is always part of closing costs. Infact any $$ above your loan ammount can be classified as closing costs. But there are too many factors involved that will sidetrack you in a second and get you a worse loan in the end. Get a Good Faith Estimate from each lender and compare thouse. (give the same information to all of your brokers so that the comparasing is real)
When can the Interest Rate and Discount Points be locked? Ok question
Usually upon request and/or after you filled out the application and commited to the loan by paying for appraisal/application fee.
How long is the Lock-In period valid for? Good question
Know your time limits and make sure your broker/ loan officer can get things dont in thouse.
What is the durability of the point's quote that was given by you verbally? Get Good Estimate and hold loan officer to it.
If there is a significant change to closing costs ($500 or more) or your rate changes after it has been locked ask why. If things seem fishy walk away from the closing.
What will be the total of closing costs? Great question
Make sure all is accounted as some loan offficers will not put everything on the Good FAith Estimate (trying to stay competitive) this is why the bottom line important. If the closing costs are low but the loan ammount 4k higher what is the other 4k for? Likely the loan officer knows there will be other costs such as title fees, state taxes,escrow account, prepaid interest which are not really closing costs but are costs to you. And he is afraid to shock you with large bottom line.
How much do you charge as junk fees? No reason for that question
Fees are fees compare the bottom line. You can get a free loan (no closing costs ) but the rate will be higher and you will just pay thouse costs over the next 30 years (likely twice as much) rather then at the closing.
How many days of interest are figured by you in prepaid? Too indepth
If you asking this question you better know what how this interest is calculated what does this mean and how banks calculate the interest in general. This question is industry specific and has no effect on your bottom line.
Can any of the fees be negotiated at the time loan process? Bad question
In order to negotiate you need to know what you negotiating for and you need to bring something of value to the table. Whould you do your job for less money? (Maybee) Whould you want to? (not likely) What will likely to hapen is the fees and rate will get shuffled to make it look better. What you can do is once you review the Good Faith Estimate and the loan parameters meet your needs then you can apprach the loan officer with the suggestion that if he is going to drop his origination by X ammount you will pay for appraisal/application fee and go with him. Also tell him that if the deal goes through smoothly you will recomend him to your friends and relatives in the future. I am willing to lose a half of point on the deal if the client is guaranteeing me business and I stand to get more business in the future but if I am being asked to work for free I "do not negotiate with terrorists" 
What are the fees that need to be paid at the time of application? Good question
Most likely its the appraisal fee and or application fee.
Are the credit report fee and the appraisal fee needed to be paid at the time of application? Good question
Just dont discount thouse lenders that want these things upfront (all i want to see is the commitment from you i dont make money off of the appraisal)
What will be the principle amount and its interest that needs to be paid every month? Good question This is the bottom line question. If 2 lenders promise you the same interest on the same loan, with same closing costs their payments should be the same.
Is there any extra fee that needs to be paid if the rate goes down? Not specific enough
What is being asked? The lenders that offer floatdown ratelocks do so for free and they factor the service into their initial rate. Brokers that deal with many lenders will do this for you for free if it is worth it. (rate needs to drop by .5 on average with all lenders)
Can the fixed rate be converted without refinancing, if yes what is the conversion fee? Too industry specific
If you asking this question you are a loan officer. If you asking whether or not you can convert into fixed rate for free the answer is no, but the lender that will have yur loan will likely offer a discount or will give you a higher then market rate to cover the expences. Any loans that have a specified conversion option will have it be specified in your closing documents.
Can a loan be pre-paid at any point of time? Great question There are alot of loans with prepayment penalties out there and while they typically offer better interest rates they can prevent you from refinancing or selling your home for a spesific period of time by forsing you to pay the lender a persentage of your loan ammount ranging from 1%-5%.
Is there any pre-payment penalty associated with this loan? Good question
If you are getting a loan with prepayment penalty make sure you know the specifics as to how much the penalty is for and how long is the period of time its effective. Also what are you limits on making extra payments without activating the penalty.
Home Owner Insurance:
Do you think that an individual inspection is required to rate the property?
Good question but
Best suited for your insurance agent, most of the time the copy of the apprasal will be enough (your loan officer can forward to your insurance agent)
Do you provide any premium discounts if homeowner's insurance are carried with you? Not a good question
While some lenders will provide insurance or will work with insurance company this is not waht they do for a living. They can suggest a decent insurance company at best but always check with your current provider.
Does the Home owner insurance policy have any provision that covers personal property that is lost, stolen or damaged within the premises? Good question but
Best suited for your insurance agent. (Asking this question from your loan officer is like asking your car mechanic about car insurance. It can be helpfull but thats not what he does for a living. )
How much will the insurance company pay and for how long if the house is completely destroyed? Once again ask your insurance agent how your insurance works.
_________________
Eugene Volovik
Home Loan Consultant
Countrywide
612-481-3127
Conventional, FHA and Commercial Lending in 48 states |
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