Posted on: 12th Aug, 2010 09:45 am
If you are looking for a low rate mortgage with low closing costs, then hopefully the information below will help you to make the best decision for yourself....
First - Shopping for JUST a low rate mortgage OR for low/no closing costs may not mean that you are getting the best deal. You need to look for the lowest combination of BOTH.
Second - There will ALWAYS be costs associated with your loan. YOU will pay those costs. The only question is whether you will pay for them out of pocket or if you are going to have a higher rate to compensate for the lower costs. Most of those costs are unavoidable. They are either goverment mandated, regulated or required by all lenders (ie an appraisal, title search, title insurance, etc)
Shopping - You should ask your loan officer to provide a rate with no points and a rate with one point. Ask each lender for the same rate quote and to provide those quotes with an estimate as to what the closing costs will be and compare them. New regulations may prevent your lender from providing a Good Faith Estimate immediately after your first conversation with them and without providing all of your personal documentation. So, a preliminary estimate of costs (not a GFE) may suffice until you decide to move forward with a particular lender. You can get the GFE later.
Good Faith Estimate (GFE) - You can trust the GFE. New regulations prohibit those actual costs on your mortgage from being different than what the GFE stated. They have to be within one eighth of 1% or the lender will have to pay the difference. However, if you ask to change the terms of the loan (different loan program, down payment changes, etc), then the GFE can be re-calculated and you have an opportunity to back out of the loan and only be responsible for third party costs (ie appraisal).
Rate / Cost Balance - You need to weigh the rate vs the costs before deciding on a lender. Helping to make this decision will be an understanding of how long you plan to be in the home. If you plan to only be in the home for a couple of years, then low cost/higher rate may make more sense. If you plan to be in the home for 10 years or more, then it may make sense to pay a little more in costs for the lower rate. Why? The lower rate will result in lower payments which over time will save you more than the costs you paid to get that rate.
Paying Points - Points are not evil. They are a tool to save you money if utilized correctly. For example, I paid two points to lower my rate significantly when I refinanced into my 15 yr loan. I already saved 2x the cost of those points in interest. This is simple math that your loan officer can help you to figure out.
Where to start ? - There are quite a few qualified loan professionals here on this site. After reading through some of the posts, contact the individual who you feel most comfortable with.
Enjoy your mortgage shopping and home buying. A good loan officer will help to take the stress out of the experience and make it a positive one.
First - Shopping for JUST a low rate mortgage OR for low/no closing costs may not mean that you are getting the best deal. You need to look for the lowest combination of BOTH.
Second - There will ALWAYS be costs associated with your loan. YOU will pay those costs. The only question is whether you will pay for them out of pocket or if you are going to have a higher rate to compensate for the lower costs. Most of those costs are unavoidable. They are either goverment mandated, regulated or required by all lenders (ie an appraisal, title search, title insurance, etc)
Shopping - You should ask your loan officer to provide a rate with no points and a rate with one point. Ask each lender for the same rate quote and to provide those quotes with an estimate as to what the closing costs will be and compare them. New regulations may prevent your lender from providing a Good Faith Estimate immediately after your first conversation with them and without providing all of your personal documentation. So, a preliminary estimate of costs (not a GFE) may suffice until you decide to move forward with a particular lender. You can get the GFE later.
Good Faith Estimate (GFE) - You can trust the GFE. New regulations prohibit those actual costs on your mortgage from being different than what the GFE stated. They have to be within one eighth of 1% or the lender will have to pay the difference. However, if you ask to change the terms of the loan (different loan program, down payment changes, etc), then the GFE can be re-calculated and you have an opportunity to back out of the loan and only be responsible for third party costs (ie appraisal).
Rate / Cost Balance - You need to weigh the rate vs the costs before deciding on a lender. Helping to make this decision will be an understanding of how long you plan to be in the home. If you plan to only be in the home for a couple of years, then low cost/higher rate may make more sense. If you plan to be in the home for 10 years or more, then it may make sense to pay a little more in costs for the lower rate. Why? The lower rate will result in lower payments which over time will save you more than the costs you paid to get that rate.
Paying Points - Points are not evil. They are a tool to save you money if utilized correctly. For example, I paid two points to lower my rate significantly when I refinanced into my 15 yr loan. I already saved 2x the cost of those points in interest. This is simple math that your loan officer can help you to figure out.
Where to start ? - There are quite a few qualified loan professionals here on this site. After reading through some of the posts, contact the individual who you feel most comfortable with.
Enjoy your mortgage shopping and home buying. A good loan officer will help to take the stress out of the experience and make it a positive one.
Hey Eric... Thanks for sharing the info in the forums. As the rates are going low, quite a number of people are planning to take out a loan to purchase a property or refinance their existing loan. But, most of them don't know how to proceed. The steps that you've mentioned will guide them in taking out a low rate mortgage with low closing costs.
Hi I am a new member , i am here to have a good discussion on various topics
edited per forum guidelines
edited per forum guidelines
We all know how to spend our money, but do we fully understand how to save it? I am not talking about setting aside a reserve for an investment or rainy day purposes both of which are good things rather, saving money on everyday items.
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Hi,
I am agree with taylorv2k10 suggestion and i hope such suggestion and views all member will share.
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I am agree with taylorv2k10 suggestion and i hope such suggestion and views all member will share.
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[URL Deleted as per forum rules. Thanks.]
You've really come up with a great idea and guidelines on how to shop for a low rate mortgage. Thanks for sharing your thoughts, it is such a great help.
I join this site, for having information about that refinancing. It's a little bit scary and I thought doing that is so risky. Can you further explain that there is nothing to worry about.
Hi barryflecthing!
Welcome to forums!
The article above mentions all the required things in order to shop for a low rate. You should should around in order to know which lenders are offering lower rates in order to get a mortgage.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The article above mentions all the required things in order to shop for a low rate. You should should around in order to know which lenders are offering lower rates in order to get a mortgage.
Feel free to ask if you've further queries.
Sussane
First of all I need your opinion. 2nd I am a mortgage customer who ndoes
research and can help you as much as I can. First of all let me give you
some advise. It is necessarry to check the rate term points and lender fees
all in the same day because rates or fees change daily morning or afternoon.
Instead of changing the rates lenders quote low rates and dont disclose the fees associated with that rate. So it is so important to add the points and fees
for a given rate. If one lender 1 point on a 100k mortgage and 1000.00
in fees the price becomes 2000.00 plus prepaids. Lets assume the rate for this example is 3.75 on a 15 year note. The next lender charges 1.5 points on the same loan plus 600.00 in fees. who has the better deal?
The fist lender has the better deal since you pay 1500.00 in points and
600.00 in fees for a total of 2100. see how the first lender was 100.00
cheaper. 2100.00 vs 2000.00. But what if the 2nd guy basis the 2100.0on a rate of 3.625% which is 1/8 cheaper then this guy has the better deal.
Go to compareinterestrates.com and do the math. If you have any questions feel free to call me Jack 978-996-8867 after 8 pm and before midnight. If you live in california call me I will give you a great company
My problem I am 62 years old working full time but not in the best of health. my 30 mortgage is 5.91% and I can do a 15 year for 3.875 with low closing cost which wont raise my payment by 4.00 a month but should I take a 30 year and save 244.00 a month I have to borrow 10k tto buy
down the mortage because the appraisal came in low. If I was 50 years old I would take the 15 not sure at my age
research and can help you as much as I can. First of all let me give you
some advise. It is necessarry to check the rate term points and lender fees
all in the same day because rates or fees change daily morning or afternoon.
Instead of changing the rates lenders quote low rates and dont disclose the fees associated with that rate. So it is so important to add the points and fees
for a given rate. If one lender 1 point on a 100k mortgage and 1000.00
in fees the price becomes 2000.00 plus prepaids. Lets assume the rate for this example is 3.75 on a 15 year note. The next lender charges 1.5 points on the same loan plus 600.00 in fees. who has the better deal?
The fist lender has the better deal since you pay 1500.00 in points and
600.00 in fees for a total of 2100. see how the first lender was 100.00
cheaper. 2100.00 vs 2000.00. But what if the 2nd guy basis the 2100.0on a rate of 3.625% which is 1/8 cheaper then this guy has the better deal.
Go to compareinterestrates.com and do the math. If you have any questions feel free to call me Jack 978-996-8867 after 8 pm and before midnight. If you live in california call me I will give you a great company
My problem I am 62 years old working full time but not in the best of health. my 30 mortgage is 5.91% and I can do a 15 year for 3.875 with low closing cost which wont raise my payment by 4.00 a month but should I take a 30 year and save 244.00 a month I have to borrow 10k tto buy
down the mortage because the appraisal came in low. If I was 50 years old I would take the 15 not sure at my age
Jack that was some of the poorest wording ever used by someone giving advice, I'm afraid. It really wasn't so much advice as it was an effort to establish yourself as someone who might have a smattering of knowledge that you can pass along to someone who also lacks knowledge, thereby jeopardizing someone else.
Your situation, assuming it's valid, is pretty peculiar. You said it "won't raise" your payment by $4 monthly...what I don't get is that if you're so knowledgeable, why is it you're asking for the advice on whether to go with 15 or 30 years? Please don't try to masquerade as an expert when you're in a financial quandary yourself.
People come to this forum for what they hope to be valid advice and counsel. When you talk about your "qualifications" and then lay on some gobbledygook about comparison shopping, you're failing someone who could use some sensible thinking. Please be careful before you hurt someone badly.
Your situation, assuming it's valid, is pretty peculiar. You said it "won't raise" your payment by $4 monthly...what I don't get is that if you're so knowledgeable, why is it you're asking for the advice on whether to go with 15 or 30 years? Please don't try to masquerade as an expert when you're in a financial quandary yourself.
People come to this forum for what they hope to be valid advice and counsel. When you talk about your "qualifications" and then lay on some gobbledygook about comparison shopping, you're failing someone who could use some sensible thinking. Please be careful before you hurt someone badly.
The only thing that i am guilty of is not proofreading my comment. as far as being knowledgable getting a 15 year with my age and health might not be a good idea I meant to say my payment would go up 4 dollars a month
my typing error. If you had a triple bypass when you 43 and a father who died at 40 of a heart attack was the reaon I asked for advise its a tough
decision to make since the average male does not live to be 77. As far as numbers go Im a math geek and know how to compare loans I was a originator part time for bradord financial. as far as mortgage consultants go the scam artists speak for themselves. I am a honest man and would never cheat my customers like most lenders do.People are interested in lining their own pockets all I want to do is help people who dont know the difference between APR and ATM.
my typing error. If you had a triple bypass when you 43 and a father who died at 40 of a heart attack was the reaon I asked for advise its a tough
decision to make since the average male does not live to be 77. As far as numbers go Im a math geek and know how to compare loans I was a originator part time for bradord financial. as far as mortgage consultants go the scam artists speak for themselves. I am a honest man and would never cheat my customers like most lenders do.People are interested in lining their own pockets all I want to do is help people who dont know the difference between APR and ATM.
Jack, I don't believe I came close to painting you as any sort of scammer; if you feel that way, I apologize. I do agree with you that your proofreading might have something to do with how I read your post and the difficulty I had in reasoning it out.
Yet it continues...are you truly concerned about helping folk know what the difference is between Annual Percentage Rate and Automated Teller Machine?
If average males don't live to 77, then you're simply not an average male. I don't plan on being one either, by the way.
Yet it continues...are you truly concerned about helping folk know what the difference is between Annual Percentage Rate and Automated Teller Machine?
If average males don't live to 77, then you're simply not an average male. I don't plan on being one either, by the way.
Bundle of thanks to sharing with us and keep us inform with these rules or cautions.
low rate of interest on CMBS and MBS are available in Canada for investment in property!
guys, besides the parameters of a loan itself, it is also quite important how the global markets and bank rates will EVOLVE WITH TIME !
For example one can see the evolution here: findatasolutions.com
For example one can see the evolution here: findatasolutions.com
Hi all,
It can be seen generally that lots of people want help of mortgage broker and without their help they have to face some trouble. As mortgage broker have all knowledge of mortgage that where are cheap interest rates so it is right option to hire them.
It can be seen generally that lots of people want help of mortgage broker and without their help they have to face some trouble. As mortgage broker have all knowledge of mortgage that where are cheap interest rates so it is right option to hire them.