How to get the best mortgage...?

[BGCarrera32]

Time to move...looking for any and all thoughts as to obtaining the best rate and lowest origination fees and closing costs. 30 year traditional mortgage, would like to pinch off some of the standard 1% origination fee...I have no problem with mortgage guys making their money but you can't tell me it takes more work to do a $400k loan than a $100k loan. Loan will be less than $400k.

Anyone ever use Lendingtree.com?

Any and all thoughts appreciated...no wrong answers.

edit: credit score is fine, that's not an issue.

[Rick Lee]

Neither you nor the lender can control most closing costs, as they are set by the state, county or city - transfer tax, recordation tax, flood cert., tax service fee, title insurance. About the only thing you can negotiate is the lender's fees and maybe atty. fees. But it's cheaper to pay the lender's fees and get a lower rate than to really bust their balls and have them lower their fees but not budge on rate.

Decide if you want fixed or an ARM by being realistic about how long you will keep the house. The average life of a 30 yr. loan, before the house is sold or refinanced, is seven yrs. Why anyone under the age of about 50 pays for a 30 yr. fixed I'll never know.

Best of all is to find a lender by referral from someone you trust and knows something about the business. And yes, it can be a ton more work to get a $400k loan done rather than a $100k loan. No one is going to bust their as$ for you if it's a $100k loan. When problems pop up, they have no qualms about letting the file die. $400k will make someone work for you. If someone makes 50 bps., how hard do you think they're gonna work for a $100k condo loan, when condos can be minefields?

[Danny_Ocean]

Originally posted by Rick Lee
Decide if you want fixed or an ARM by being realistic about how long you will keep the house. The average life of a 30 yr. loan, before the house is sold or refinanced, is seven yrs. Why anyone under the age of about 50 pays for a 30 yr. fixed I'll never know.

This is why:

http://www.bloomberg.com/apps/news?pid=20601087&sid=afjq9WCz.Zy8&refer=home

With ARM's, you don't know how much your payment will be in 7 years, you don't know how much your home will be worth in 7 years and you won't know if you'll be able to sell your home in 7 years for more than your increasing principal.

With fixed, I know exactly what my payment will be for the next 30 yrs (although I will pay-off my mortgages in 15 ~ 20).

As to the original question, I called 3 people: Mortgage broker, a bank and E-Loan. The bank had the highest rate, the mortgage broker had the lowest rate. E-Loan was right in the middle. The broker started dropping the ball halfway through the application process. I didn't want to lose the good deal on the home I was purchasing, so I called (actually e-mailed) E-Loan and asked if they would match the rate provided by the mortgage broker. They agreed and the home closes Friday.

[Dantilla]

I would never use Lendingtree.com.

Not because of any bad experience, but because of the great service I received from a mortgage broker that was familiar with my particular situation. You'll never get that from a website where you're supposed to just check the right boxes.

Like any other profession, there are good ones and bad ones. My broker was an aquaintence, who became a friend because of her exeptional service.

Instead of trying to maximize her income from me, she found me a 15-year fixed that blew everything else away. What she gained from it is repeat business.

For banking issues, I'm a big fan of independant, local banks where I can actually talk to the decision makers.

(I signed closing docs for three different loans in the last couple of days. Isn't real estate fun?)

[Danny_Ocean]

I was skeptical of an on-line brokerage, but E-Loan worked the docs like a machine. They met every deadline and I was updated with an e-mail everytime an event occured. I log-in to my account and can see exactly what has been done, what is scheduled and all docs are scanned to view/print if necessary.

The "bricks & mortar" brokerage dropped the ball. Their excuse? My loan agent was pregnant and has been stressed lately...I said "you're fired!".

[RANDY P]

lendingtree.com is a referral source to brokers and direct lenders alike.

If I was to shop, I'd find a referral to a mortgage broker, then check against Bank of America, and Wells Fargo.

That's all you need to do. I have a feeling that B of A will win this one.

rjp

[RANDY P]

oh, and in case you didn't get it -

lending tree is a lead generation site. They sell your info to anyone who buys it -

that's how they "compete'

[motion]

Lending Tree has served me very well on many loans over the past few years. You might be surprised. Its a great way to play a broker against another offer, which is something you MUST do to not get hosed by your broker.

[Neilk]

Referrals from friends and then play the brokers off each other.

A friend told us to use her broker as she had consistently offered the best rates. When we contacted the broker, she said she would waive the origination fee since we were a referral.

Her rate was 1/2 that of the other brokers we were talking to. All her competitors were saying that she would nickel and dime us when it came down to closing and that there was no way that that was her final rate. Funny thing is, when it came down to the wire, they all matched or beat her rate by about $100 with the same interest rate. However, because she was straight with us from the beginning, we stuck with her.

So in short, ask your friends and co-workers and then play the brokers off each other.

[John Brandt]

BG,
As a Mortgage guy myself, I can tell you that you'll be able to find somebody who will do your loan with no origination and below the published rates, because you have a nice sized loan and your deal will be agro-free.

[Rick Lee]

Anyone can waive the origination fee on paper but just build it back into the rate, so you don't see it. I'd much rather pay that or a fraction thereof, since it's a prepaid point and tax deductible, than pay the $895 doc. prep. and $500 underwriting and the other junk fees that you can't deduct from your taxes.

[KFC911]

Originally posted by Rick Lee
.... Why anyone under the age of about 50 pays for a 30 yr. fixed I'll never know.....

The same reason anyone would opt for a 30yr/fixed....lower REQUIRED monthly payments...I don't understand your confusion. When I was starting out, I "anticipated" the amount of monthly payments that I could reasonably afford (in order to pay off the loan in x years), but I didn't want to stretch myself too thin "just in case". Although I anticipated paying off the loan in much less than 15, I opted for a 30 because of the flexiblilty it allowed. I'm not in the biz, and don't consider myself to be an expert, but in my case, after careful analysis, it just made sense (not cents)

ps: For me, the difference in total interest paid out (over the life of the loan) between the options was trivial, while the lower "required" monthly payments (earlier in my career) allowed me sleep easier.

[Rick Lee]

You can add one P&I payment per year (monthly payment divided by 12 and that amount added to each month's payment as extra princ.) and knock seven years or 84 payments off the end of a 30 yr. loan. Doubling up is good too. But lots of folks strecth to get into a house, especially their first one. And there's next to no chance they'll keep their first house for 30 yrs. So there's no point in paying for a 30 yr. fixed IF other options are cheaper and they usually are.

[Joeaksa]

Call your current morgage holder and ask them if they want to keep your account. If your FICO is good ask them to pls give you a quote on a new loan with a different house.

I did this and my old morgage holder shot me a deal I could not refuse. No points, $800 cost and 5.5% interest. Minimal paperwork as they knew me already.

Might give them a shot first, and if you are not happy with it then look elsewhere.

[TerryBPP]

I just ran mine thru Lending Tree and the refi charges are sporty if I am reading them right:

National City

30 YEAR FIXED (TERM)
$300,000.00 (AMOUNT)
$1,871.61 (PAYMENT)
6.375% (IR)
6.612% (APR)
$1,495.00 (ADDITIONAL FEES)
$7,495.00 (TOTAL REFI FEES)

THATS LIKE 3PTS!!!!

[Rick Lee]

In lots of states, it's pretty common for closing costs to get to 2% of the loan amount or sales price. For refis, it's not usually as bad as it looks, since, if they escrow prepaids, you get the old ones refunded to you a month or so after closing and you can usually get title insurance reissued and the survey recertified. I'd want to see a GFE and talk to a human being before discounting that offer.

[p911dad]

If you are interested in actually paying off the mortgage quickly, something I have done in the past is to use a bi-weekly payment option with a 15 year term. You may need to use a local S&L or Credit Union to find this. The advantage is you make 26 payments a year and 2 of them go directly to the payment of the principal. You can actually knock down the mortgage in less that 13 years if you keep at it. It is tough to deal on the closing costs, like Rick says, most of that is fixed, and some of it is local tradition.

[stomachmonkey]

I did a 30 fixed on my current place because I knew I'd be out in 5-10.

Was a spotty time in the market. Had just watched my folks who had a variable get hosed on the house short term. They had a variable and interest rates were going nuts. After 7 years they owed more than they did day one and the housing market declined so the house was worth less than what they paid for it. Total Fuchage.

Variables are cheaper over the long haul but can be a bad bet short term.

I round every payment up to the next thousand and pay bi-monthly.

[Rick Lee]

Originally posted by stomachmonkey
They had a variable and interest rates were going nuts. After 7 years they owed more than they did day one and the housing market declined so the house was worth less than what they paid for it. Total Fuchage.

Their being upside down on the house had nothing at all to do with the ARM, unless it was an Option ARM and they foolishly made only the min. payment and racked up neg. amortization. That is nothing like a traditional ARM.

[KFC911]

Originally posted by Rick Lee
.... But lots of folks strecth to get into a house, especially their first one. And there's next to no chance they'll keep their first house for 30 yrs. So there's no point in paying for a 30 yr. fixed...

I agree on the first point (as was the case for me too), but I disagree with the last two. I use every house I've ever purchased as a long term investment just like many do. There are good reasons for "some" 20-30 year olds to lock into a 30 yr fixed imo, and it's worked great for me. I agree, that it doesn't make sense for most folks, but it is a logical, sound strategy for some. I bet there are quite a few folks on here who still own their first house (or one purchased many years ago) and hung on to it as an investment property.