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Lender fued


Aerovette
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Ok, i have been shopping mortgage rates and have two contenders. Each one is telling me the other is full of crap. Instead of getting the best deal, I am having to decide who is being truthful and I lack the knowledge to do so.

Lender 1 - Tells me I do NOT qualify for an 80/20 but can do 100% financing at 6.125 with PMI at $136.00 month and closing costs rolled in so all I pay is prepaids on tax and hazard insurance.

Lender 2 says- 80/20 at 7.0% and 8.5%

Lender 1 says there is no way that rate on the 2nd mortgage is good and I will get a surprise at closing.

Lender 2 says PMI from Lender 1 looks like they are using a Fanny Mae "My Community" program and that my income prevents me from qualifying. Lender 2 says I will be in for a shock at closing.

I am LOST who do I believe? Do I seek out a tie breaker and take another hit from an inquiry to my score?

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Hi - I'm a Loan Officer in New York. Needless to say every situation is different, out of 800+ loans under my belt. I have never done the same loan twice. My job is like playing a game of cards, where we analysis people's situations to get them a winning hand. Is this a purchase or refinance? What is the loan amount?

In your case, are you going to be living there the rest of your life? If so go with the lower fixed interest rate possible.. After one to two years, depending if your value raises (plus if you buy down your principle), your equity will grow to 20% (80% LTV). Then you call up the mortgage company and say my value has gone up. Pay for another appraisal, and the PMI is taken off. This will save you from refinancing again.

If you are looking for the lowest miniumim payment, go with lender 2. Though personally I do not like 80/20 type of loans. The second mortgage is like a credit card - "On You Home". They are easy types of loans to get into, it's like a vinus fly trap - once youre in them, it's hell to get out of. Example - the second mortgage bill's you a reduced payment so an amount goes back into the principle. It will take years before you develop any equity. If you are only going to live there say less then five to seven years, again this would be a better option.

Important - tell your loan officer you want to go over your HUD (closing costs) before you meet with the closing agent. Tell him if it is'nt to what you are agreeing to, you will walk from the table......

Something to remember when you get your loan - one extra payment a year will knock off almost 7 years off your mortgage. It also lowers your net effective rate about 2%, plus sending in more than to required payment raises your credit score.

Good Luck - my $00.02.....:)++

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Hi - I'm a Loan Officer in New York. Needless to say every situation is different, out of 800+ loans under my belt. I have never done the same loan twice. My job is like playing a game of cards, where we analysis people's situations to get them a winning hand. Is this a purchase or refinance? What is the loan amount?

In your case, are you going to be living there the rest of your life? If so go with the lower fixed interest rate possible.. After one to two years, depending if your value raises (plus if you buy down your principle), your equity will grow to 20% (80% LTV). Then you call up the mortgage company and say my value has gone up. Pay for another appraisal, and the PMI is taken off. This will save you from refinancing again.

If you are looking for the lowest miniumim payment, go with lender 2. Though personally I do not like 80/20 type of loans. The second mortgage is like a credit card - "On You Home". They are easy types of loans to get into, it's like a vinus fly trap - once youre in them, it's hell to get out of. Example - the second mortgage bill's you a reduced payment so an amount goes back into the principle. It will take years before you develop any equity. If you are only going to live there say less then five to seven years, again this would be a better option.

Important - tell your loan officer you want to go over your HUD (closing costs) before you meet with the closing agent. Tell him if it is'nt to what you are agreeing to, you will walk from the table......

Something to remember when you get your loan - one extra payment a year will knock off almost 7 years off your mortgage. It also lowers your net effective rate about 2%, plus sending in more than to required payment raises your credit score.

Good Luck - my $00.02.....:)++

The loan amount is $276,000. It seems to me that paying PMI is the way to go with such a low interest rate. Also, this year the PMI is tax deductible. 6.125 for 30 years is better than 7.1/8.5 on an 80/20 for 30 years no matter how you slice it. I plan to be in the house longer than 5 years. My concern is that just before closing, something will change. How is PMI calculated?

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"PMI" Is Issued With Conventional Loans Only. PMI Is Required With Less Than A 20% Down Payment. Not each lender has the same rates used to calulate PMI. When you have PMI, the interest rate remains the same no matter if your putitng $$ down, or nothing down. What changes is the PMI payment increases with the less of the amount you put down for your down-payment.

Find out through your broker who the bank is, go to their web site and get a copy of their PMI sheets. I did a search through Google, there is alot information out there explaining it.

I am doing a purchase in Florida right now with PMI. I'm getting my borrower 5.875% (locked), so I know what the rates are. At 6.125%, with interest rates right now, your broker is making more then 1% on the back.

What state are you in? Interest rates do differ between states.

On a loan you are going to stay in, by having the lowest rate, you saving $10k's over the life of your loan. It is better to pay the 1% to 2% up front.

What you should do, tell your broker you went to bloomberg.com and saw rates in the upper 5% range and you want a par rate......

I hear this alot - interest rates are somehow connected to the stock market. After a few bad days in wall street, interest rates always come down. The last few days here in NY watching the news on TV, and listening to the radio. Is about how much wall street lost.

The secret is locking in the rate at the right time. It doesn't cost you anything to lock a rate, however once you lock a rate, your stuck with that rate.

Gary - :)

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I have been emailing both of these lenders all day. Is it ok to be pitting them against each other? I feel like I am doing something underhanded. I get a proposal and then go to the other one and ask many questions and tell them what program I was offered, then that one comes back with a different proposal telling me why the other lender's proposal is not the way to go, then the first one tells me what is wrong with lender 2. Crazy. So now one lender tells me I can't get an 80/20. The other says I CAN get an 80/20 and shows how much I save by NOT going with 100% and PMI. What should I do? Find a third lender? Keep pitting them against each other? When does PMI expire? How do I get out from under it? For some reason the lender thinks it lasts only 72 months, but I will not have 22% equity in 72 months.

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In my email to you earlier, I explained I am not licensed in Texas. (though my previous bank was - I am familiar with Texas law). I grew up in Austin, and know your area. I just trying to steer you in the right direction.

On the GFE you emailed me, it looked like your getting cash back doing the Fanny Mae loan. I showed it to my manager, he said it would be hard to beat. Because you are planing to stay in your home. It is better to go with the low fixed rate with the PMI. Starting this year PMI will be deductable in your taxes. Additionally, when you have 20% equity built up in your home, the PMI can drop off (it will be your responsibility to inform the mortgage company).

Ask the broker who wants to put you into the 80/20, if he knows about the Texas Homestead Act. :confused::shock::confused:

Texas is the only state in the country that only allows you to refinance once at 80% in the life time of your mortgage. See last paragraph/link http://www.dallasrelo.com/homestead.html

I wonder what he has to say about that?.....8-)

If you go with the 80/20 - you will be paying thousands $$$ more in interest over the life of your loan. It will take you years before you develop any equity. You will be paying a higher rate. When it goes to refinacing, you will have closing costs to eat up even more equity. Mentioning the Homestead act, it's a one shot deal with refinancing your home.......

As for paying more, here's the numbers working out with a bank calulator

Option A 100% - $276,000 @ 6.125% = ($1677 x 360mths) + (48mth x 136pmi)

= $610249 ($1813 p/i payment)

Option B 80% - $220800 @ 7% = ($1469 x 360mth) = $528836

2nd Mort 20% - $55200 @ 8% = (424 x 360mth) = $152798

($1893 p/i payment)

Total = $681634 / - $71385 more than option one

Payment on option B is more, if you made the same payment on option A

you would take your term to 267 months (22 years)

* assuming 2nd is on 360mth term, if on 180 mth term payment will be $544

Explaining PMI - it will last until you are vested 20% in your property. To make that happen, over time your value increases. In the other direction, you are paying down on your loan. When you meet the 20% mark, you will have to pay for an appraisal (around $350 - price right now). Adding PMI and having it drop off in the future. This is much cheaper than refinancing, which will cost you thousands.

One thing you need to make clear with broker A. Ask her about your income, if it passes Fanny Mae guidelines. If you qualify this is the program to go with.

Good Luck Jeff

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[quote name=

As for paying more' date=' here's the numbers working out with a bank calulator

Option A 100% - $276,000 @ 6.125% = ($1677 x 360mths) + (48mth x 136pmi)

= $610249 ($1813 p/i payment)

Option B 80% - $220800 @ 7% = ($1469 x 360mth) = $528836

2nd Mort 20% - $55200 @ 8% = (424 x 360mth) = $152798

($1893 p/i payment)

Total = $681634 / - $71385 more than option one

Payment on option B is more, if you made the same payment on option A

you would take your term to 267 months (22 years)

* assuming 2nd is on 360mth term, if on 180 mth term payment will be $544

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I am also a loan officer in major city. Personally, I cant stand being "shopped" like this. I tell my clients up front (especially lending tree clients) that we all basically see the same rates. I am a direct lender, NOT a broker, so its my money, meaning i bring a check to the closing table, i have full control of your loan, underwriting, closing, title, processing, all of it. long story short, the minute I start getting shopped by someone, its time for me to go. I have too many other clients and referrals that extend the trust and my professional relationship and stop nickel and diming the loan officer of fe hundred bucks diffence in "closing costs" or 1/8th in rate or something. you are giving yourself ALLLLLLLLLLLLLLLLLLLLLLLLLLLOT of headache and just making things worse for you.

these "lenders" must be really pretty desperate for a deal to keep changing the loan and structure.

trust me when i say this: this is the biggest purchase you'll ever make (unless you hit lottery and start buying yachts and mansions)

so, do yourself a favor, and PICK ONE! when it comes down to it, and you have weeded out the super high guys, and the "too good to be true guys" and you are left with one or 2 that you like and feel comfortable wtih.

PICK ONE! just say "banker guy/girl, i like you, i am going to go wtih you, im putting my good faith in you and feel you will work hard to keep me informed, updated and my loan will close on time as promised.

you can go back and forth for WEEKS doing what you are doing. rates change every day, also keep that in mind. as a loan officer. one day i price oput a loan and im making say for lack of better number, 500 bucks, the next day i price it out and i only am making 470, or maybe 560, so at some point, you need to LOCK IN YOUR LOAN. make a decison.

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I'm not a loan officer, but I am in a major city.

Any loan officer not willing to be shopped gets dropped right away. There's enough other lenders out there willing to come down on rates.

Biggest problem is you have no idea how good the rate is if you don't shop around.

I had a loan officer help me on the way to fixing my credit. I appreciated their help and wanted to work with them, but when I got my GFE from them, it was so much higher than others I got.

They were able to come down a lot, but that only makes me think they were trying to screw with me initially. I just figure they're all trying to screw with me and I'll shop around until I find the best. This is your biggest purchase. You owe it to yourself to get your rate and all costs as low as possible. This is all about YOU!

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im not a loan officer but craig makes a good pt w/100% financing.

if you can afford the 1300+ payment an additional 136 bucks is a drop in the bucket, with such a low interest rate over the lenght of the loan.

I dont like 80/20 either they are complicated and tricky whereas 100% u know where u stand form the beginning.

Also I would never get cash back on a loan.

just my opions.

h

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I have NO issue shopping the mortgage. My guilty feeling came from sharing one lenders info with another as leverage. I agree that if I didn't get the best deal the first time, then they were hoping to screw me. As for making a choice, I belive I have and the choice is based on the person that gave me the best deal right out of the gates. She'll get my business. For those keeping score at home, that is the 100% deal with PMI and 6.125% although I may buy down a half percent.

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I have NO issue shopping the mortgage. My guilty feeling came from sharing one lenders info with another as leverage. I agree that if I didn't get the best deal the first time, then they were hoping to screw me. As for making a choice, I belive I have and the choice is based on the person that gave me the best deal right out of the gates. She'll get my business. For those keeping score at home, that is the 100% deal with PMI and 6.125% although I may buy down a half percent.

I am glad you are committing (after our emails last week), the 80/20 broker seem to be changing his numbers, no doubt when you get to the closing table they would of been different.

Good Luck Paige...............:-)

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