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| *Loan,banking and credit>>>mortgage loan |
Home Loan Mortgages - what to look out for? |
My wife and I are planning on buying a house in the very near future and I just met with a mortgage broker (Washington Mutual). He run some numbers and run our credit scores (which are in the mid 700s). Now I have a question: - Besides seeing maybe 1 or 2 more institutions (we will check with our CU next), what are a few things to look out for? - Where can brokers "get you" if you are not informed enough? - I heard to make sure they use "fully documented income" rather than "stated". At what point do I have to make sure they are using fully documented? - Somebody else told me to watch out for "pre-payment penalties. Again, at what point do I need to ask? - Besides the two above mentioned questions, what is really important to look out for? Thanks This would be fun to ask and I wish I would've asked when I had a chance but ask the broker what kind of commission they get from your business. It may not be called commission but more of a loan origination fee etc. you might have to pay this at any place but it would be nice to see if this comes out of your pocket and if the broker is up front why would they want to hide it from you and not say anything about it? You probably already know about different loan types like HUD, FHA, but ask if there are any benefits for you from ARM, interest only loans etc. since your particular situtation may work out with these. You should obviously be asking about 30 year loans vs. 15yr loans and can maybe benefit from getting a loan where you make 2 payments a month versus one, it actually DOES make a big difference even if you pay lets say $500 twice a month versus $1000 once a month but there may be an additional fee(S) from the lender for tracking your payments under that program. You can also go through like CitiMortgage or lending tree or bank of america etc. If you go with a 30 yr loan and pay let say one xtra payment per year it also makes a difference and you wouldnt have to commit to shorter term loans. I think the more people you check with though the more your credit gets checked (meaning more credit inquiries) and the lower your credit score can go so be careful. Ask the pros though they should be able to get you straight, I am not one just pointing out some things you might want to think about. lign="right" > Sign in to vote! Look for Yield Spread Premium, how much are they charging you in points, origination fee, etc. Although brokers generally have a lot of different loan programs, with your credit scores, I see no reason for you to Have to use a broker. You will very likely get a better deal from your credit union. They will get you in the fees (some listed above) and interest rate. Full doc means you are showing tax returns and paystubs, and actually documenting your income rather than just saying we make $x/year. All of this you should ask before you commit to using the lender and verify again before you sign any closing documents. lign="right" > Sign in to vote! It sounds like you are off to a good start with a great FICO score-which really should put you in the driver's seat. You are right about the prepayment penalty-avoid that. So where do you start? Unless you know someone in the business that you trust I would start by doing some independent homework. Real estate agents usually have a favorite company that they like to do business with鈥攋ust be careful. It's like asking a hotel front desk clerk where the best restaurant is. You'll get an answer鈥攐nly colored with their opinion. Ask friends and relatives of their experience for a start. Your bank will try to sell you their services. To my way of thinking it is best to talk to someone who is knowledgeable, someone who can explain the ins and outs of the products that might best suit your needs. A first time buyer will need a different loan than someone buying a $500,000 home. To find best deals available you must trust your gut feelings and do your own homework. You may find various mortgage companies advertising via mailers, ads in newspapers, magazines and billboards. Pay attention and try contacting these companies. Additionally, to help reach your conclusion there are many websites on the Internet where you can get quotes. This is one of the fastest and easiest ways to compare. There are several sites that will give you three or four quotes. Just remember there is more to the loan than the rate and the term. There will be fees and costs that you will be expected to pay at closing. Do not forget to compare the mortgage rate and enquire about hidden costs. These closing costs are outlined in the "good faith estimate." that you should get within three days of applying for the loan. It will list costs related to inspections, taxes, title insurance and other charges. You also should receive an information booklet, "Settlement Costs鈥攁 HUD Guide." The crux of the story is to do your homework, research well before deciding on a particular company. Though it seems easy, it isn't. If it seems too easy you probably have made a mistake. Here are some sources of information and sources of independent quotes. If you are in the market for a mortgage, home equity loan, or refinance http://www.m-o-r-t-g-a-g-e-r-a-t-e.com... has some great information. Find out how to get up to 4 FREE No Obligation Mortgage Rate Quotes. LEARN HOW you can save some serious money and get FREE Home Equity Loan Information at http://www.h-o-m-e-e-q-u-i-t-y-l-o-a-n.c... Good luck lign="right" > Sign in to vote! First of all stop going to all these different banks and credit unions. Each will get a credit report with for their company. This can lower your score. Also if you go to one particular institution they will sell you their product and if they don't have one that you want then you have to start over. Comparing products sometimes can be like comparing apples and oranges. You have to know what you are qualified to purchase even if you have bad credit. So the first thing you should do is contact a mortgage broker so you can complete a loan application, after which he will run your credit report. There fees are about the same as anyone else's and they have many many underwiriters that underwrite their loans for them. Running numbers will not give any mortgage professional a true picture of what you are qualified for. A fully documentated loan is better as oppose to a stated income loan in the fact that normally the rate is better. Normally all loans now come with a prepayment penalty. The prepayment penalty can be for 2 or 3 years. Normally, if for some reason, you decide to sell you properety there will be no prepay. If you decide to get a refinance then you will be required to pay a prepay Then there is the prepay where no matter what you decide to do you will be obligated to pay a prepay. You need to ask these questions while sitting with your mortgage broker, tell him your plans ask about any prepay and how you can get rid of it. Make sure that the interest rate, terms and other conditions you were promised prior to the loan docs are actually on the loan docs themselves. Call and ask for an explanation if they are not as promised. It is too late if after 2-3 years into the mortgage you come up with a "I thought or I was told" If it ain't in writing it ain't gonna hold up in court. This credit report will give him your credit score. Get a cup of coffee or your favorite beverage when filling out the loan application this is not a 15 minute chore. Your credit score will tell him what loan programs you are qualified for as well as the interest rate you can expect. This credit score will tell if you are able to get a 100% loan and if not how much cash you have to bring to the table as your down payment. There are lots of documents and information the mortgage broker will need. I will give you a few to get you started. #1 Six months of all bank statements you use currently, as well as any statements from your 401k at your place of employment #2 One months of pay stubs from all that are going on the mortgage. #3 Two years of federal income taxes and W-2s After discussing the best loan program for you and agreeing on the program you want, the mortgage broker will issue you a pre-approval letter. Now once this has been established you should connect up with a real estate agent to find you a home. Upon finding a home you like the real estate agent will then prepare a sales contract for you and the seller to sign. The mortgage broker will order an appraisal of the house to prove the value. Once all the documents necessary has been collected the mortgage broker will order loan docs for the program that you agreed to earlier. Again don't plan on spending a lunch hour there to sign loan docs this is a process so be prepared to be there for awhile. Don't sign the loan docs if anything change from what the mortgage broker explained to you. Call and get an explanation. I hope this has been of some use to you, good luck. "FIGHT ON" |
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