Mortgage? with PMI

Congratulations on paying off the debts. That's a great accomplishment.

I'd be careful about getting yourself into a ARM mortgage right now. Mortgage rates are going much higher over the next few years, and you don't want to get trapped.

I suggest that you look for a lender who will write you an 80/20 mortgage with fixed rates. That way, you avoid the PMI and the interest rate flux. You won't have to put any money down, and you can keep the total payments in the $900 range.

 

$6679 in closing costs as good faith estimate???? That too on a $140K loan? You are being ripped off. Run, don't walk, from your mortgage broker.

Closing costs have nothing to do with your credit history; it's only the interest rate you would have to pay if your credit history isn't top-notch.

Care to give a detailed breakdown of your closing costs from the GFE?

 

Yeah, those guys are ripping you off.

The origination fee and discount points are total BS. 1/2 the other fees are bogus, too.

Find another lender. Your credit scores are good enough to get an 80/20 without PMI and with a decent interest rate.

 

TK, "too much" summarized correctly what I was going to say. My comments are in red below.

Best of luck

 

-realtor admin/broker fee $ 195 Can't say about this EXTRA PROFIT???

 

So how do you go about negotiating a origination fee? $1400 is excessive? On my good faith estimate, it's $1500! Yikes!!

My home in the Dallas area is gonna be $138.9k and besides the down payment, the closing costs are gonna be $6167.22. Fortunately, the sellers have agree to pay $3k of this.

 

Re: Re: Mortgage? with PMI

Simple ... go to another lender or broker who wants your business! Or at least, make sure that for the money you are paying, you are getting an interest rate that is lower than what competitors are offering.

My experience tells me that credit unions are the best way to go when it comes to mortgage lending. They often carry no origination fee, most likely will also remain your mortgage servicer for life, and through that relationship, you may be able to get a host of other benefits. My credit union, for example, offers discounts on auto-insurance if one carries mortgage through them. There are disadvantages too -- they tend to deal with only select few mortgage lenders (or may have inhouse lending department), so they tend to be inflexible about the interest rates.

When I bought my home almost 3 years ago, the interest rates were in stratosphere (8.375% -- hey, compared to today's rates, those were stratospheric you know ). I shopped diligently around for rate quotes, and I had narrowed it down to 2 choices.

1. Mortgage broker, asking for $995 origination fee, but quoting me 8.0% rate. Tried negotiating, but unsuccessful, broker did not budge
2. Credit union, no origination fee at all, but interest rate was still 8.375%

I went with choice (1), but knowing full well that I would recoup the origination costs within about 14 months. That's what I want you to consider when making your decision too... is the $1500 you are going to spend get you any tangible benefit? If not, dump the broker.

And oh, by the way, I refinanced in Feb this year for 5.875%

 

Re: Re: Mortgage? with PMI

Why not just deal with a big lender who has a reputation for providing upfront estimates that they stick to?

Ditech.com
eLoan.com

Both will give you a closing cost estimate up front, and they won't include bogus fees and other charges.

Small, local brokers are a lot more likely to play games. The big, reputable places aren't as likely to do so.

 

Re: Re: Mortgage? with PMI

Best of luck. I would also suggest that you pay for scores from all 3 bureaus using myfico.com, and take the scores also with you when you meet your credit union rep. Plain old reports may or may not be sufficient for them to give you accurate advice.

 

Re: Re: Mortgage? with PMI

Good luck. But the credit union may still want to pull their own reports for the score. When I got my auto loan, I was talking to the loan officer about credit scores and reports. She said mine was around 280 or something. I asked how I could get financed with that low of a score and she told me they use a different score, called a risk score. The lower, the better. It tells how much of a risk you are.

Just when we thought we had it figured out!!

 

I would seriously consider finding your own lender instead of a mortgage broker.

Any credit unions nearby that you can join?

I refinanced with my current lender and closed on Monday...5.75% on a fixed 20 yr mortgage...no PMI as our appraisal was high enough to get rid of it YIPEE...payments 130 less per month then our old mortgage.

I would see about an 80/20 loan as others suggest. Saves on PMI.

But I would also check out some local banks as far as rates...sometimes they can vary widely. I don't like brokers as they have fees that seem high to me. Our total closing costs and escrows were 2200.00....

 

Re: Re: Re: Mortgage? with PMI

Hi TK,

I cannot really comment on your broker's assertions ... but wanted to offer some help.

You are in Minnesota? I too was in MN a few years ago. I am going to suggest that you join Minnesota's Credit Union ... http://www.mncu.org. Through them, get a quote from Ellis Mortgage Inc, and see what they say.... just a suggestion. The membership criteria for joining MNCU is just that you need to be a resident of Minnesota, or be related by blood to one who is a current member.

When I became a member, MNCU did not offer mortgages, and since then I moved to NJ... so I cannot really say anything about their mortgage process, but MNCU itself has served me well regarding checking, savings and VISA cards; am quite satisified with them, and will definitely recommend them to anyone.

Also, do you know anyone who has a credit card they held for a long time (preferably > 10 years), and willing to make you an authorized user? Once such an entry shows up on your report, your score gets an instant boost ... the only factor is the time it takes them to report ... usually at least 30 days. When are you closing?? Do you have 30 days time? If so, do this to boost your score.

To avoid PMI, ask for a 80/20 combo loan ... unfortunately, regarding PMI, I think your broker IS correct ...

Best of luck on your mortgage ...