[Sandwich]

Can anyone provide me with some help picking out a mortgage lender? Rates are crazy right now and we've found a house to buy, now we need to pick a lender. I have a broker and a bank on the hook- the bank is @ 4.173% and the broker @ 4.125%. The PMI for the broker is 50 bucks higher than the lender...but I can't figure out why... Any advice as to which is the best way to go?

 

[dante]

I *think* that PMI is provided by a private entity, so therefore it could be a different company offering to service that aspect for the broker instead of the bank. 0.05% isn't that much, so I wouldn't even worry about it (literally a couple dollars per month). Focus on whichever one offers the lowest payment (including PMI), as well as issues like:

1) Will they hold your loan or sell it to someone else?
2) How easy will it be to pay? Automatic payment?
3) When can you get out of PMI, and how hard is the process?
4) Once you have your 20%, can you get out of escrow?
5) If rates drop farther, is there an "easy refi" option?

If I had to do it over I would have checked with the local banks and credit unions instead of going with WF, just because of the "keep it local" mentality. Also, keep in mind that since it's easiest to do all of your banking with one institution (especially with regards to automatic billpay), and since your mortgage is impossible to transfer from one bank to another without refinancing, you'd better be happy with whichever bank you're going to go with...

 

[clarkenstein]

good stuff dante. i worked in banking for a while, i got some stuff to add.

I *think* that PMI is provided by a private entity...

it depends, but the difference in cost could be the broker taking a cut of the payment as well. you may want to look further into that.

1) Will they hold your loan or sell it to someone else...

this won't affect a borrower too much, unless the loan servicing is sold along with the loan, so i would look a little further and see if they plan to sell the loan (which is almost guaranteed by a broker) and if the servicing (the entity collecting the payment is the servicer) will be sold too.

if the servicing is sold, just be real careful about where you are sending your payment. scams have happened where people send their payments to non-legit places and lose out on mortgage payments due to a con.

Also, keep in mind that since it's easiest to do all of your banking with one institution (especially with regards to automatic billpay), and since your mortgage is impossible to transfer from one bank to another without refinancing, you'd better be happy with whichever bank you're going to go with...

another point to add here too is if you do automatic payment through the same bank you got the loan from, they will sometimes offer a .25% discount on your interest rate. be sure that the bank you are looking into is not selling you that rate and if they aren't, see if they offer that (i know bank of america does).

 

[Sandwich]

thanks guys.

I called and checked. One bank is Flagstar and the other is Coldwell banker mortgage. Flagstar apparently uses a "Credit-tiered" PMI system, so based on our excellent credit, we get a discount. I asked the loan rep and he said there are no fees associated with the discount, as the CB broker said there would be. The rate is still slightly higher with flagstar.

I'd really like to go with Bank of america, as much of our money is with them, but rumors are that they are having a hard time closing loans with the ongoing restructuring. We're hoping to close in October, and I'm not sure that'll happen if they're goofing off the whole time. I haven't reached out to them yet, as the rep I was speaking with was out of town.

 

[dan-o]

Check out Salem Five bank.
Great local bank that's always treated me well for both personal and business banking.
We just re-fi'd to a 15yr @ 3.3%.

 

[DirtMcGirk]

I went with B of A for my first home loan in Virginia.
Never again.

 

[dump]

thanks guys.

I called and checked. One bank is Flagstar and the other is Coldwell banker mortgage. Flagstar apparently uses a "Credit-tiered" PMI system, so based on our excellent credit, we get a discount. I asked the loan rep and he said there are no fees associated with the discount, as the CB broker said there would be. The rate is still slightly higher with flagstar.

I'd really like to go with Bank of america, as much of our money is with them, but rumors are that they are having a hard time closing loans with the ongoing restructuring. We're hoping to close in October, and I'm not sure that'll happen if they're goofing off the whole time. I haven't reached out to them yet, as the rep I was speaking with was out of town.

Personally, I would do everything to avoid dealing with BOA.

 

[Sandwich]

Haha, fair enough. My realtor suggested the same thing. I think I can't go wrong with either of the guys I'm speaking with, but having lower PMI helps more, as we can expect to pay that for 3-5 years, and it's the first couple of years that I'm concerned with. I'd rather pay the ~4000$ difference over the course of 30 years to save 2grand in the first 5.

 

[C.P.]

Check out Salem Five bank.
Great local bank that's always treated me well for both personal and business banking.
We just re-fi'd to a 15yr @ 3.3%.

I would also recommend another local bank also in the area, CapeCodFive (or if possible a federal credit union). We also just re-fi'd to a 15 yr at 3.3%.

Another added benefit is to have easy access to your bank's payment (US Postal) mailbox address (and servicing should you want to walk in and actually talk to a face), CapeCodFive's is in Boston and Orleans on the Cape. If you choose to not do electronic payment, you can know that at minimum the mail will get a payment envelope delivered within 1-2 days. (I dont like making payments with on line banking).

BTW, CapeCodFive was the most competitive offer I received.

Oh, and also this:

Personally, I would do everything to avoid dealing with BOA.

 

[CrabJoe StretchPants]

PMI can suck my butthole.

 

[Sandwich]

yeah pretty basically. Anybody have an opinion on whether 0.05% interest on a 30yr fixed is worth $50 less in PMI costs? We'll pay more over the course to pay less in the first couple years, which is when we'll also be doing much of the renovations and pooping out kids. I think the savings now will be more beneficial than the savings over the course for a higher monthly payment now....

dur?

 

[dump]

My dream would be to buy a house & pay for it in full. Work with a lawyer to process the papers & call it a day.

 

[clarkenstein]

yeah pretty basically. Anybody have an opinion on whether 0.05% interest on a 30yr fixed is worth $50 less in PMI costs? We'll pay more over the course to pay less in the first couple years, which is when we'll also be doing much of the renovations and pooping out kids. I think the savings now will be more beneficial than the savings over the course for a higher monthly payment now....

dur?

i'd have to know the balance that you are borrowing on to do a true calc (not asking you to share) BUTT

thangs to consider:
1) PMI ain't tax deductible, mortgage interest is if you itemize, so the higher mortgage interest amount really won't amount to much, and you'll probably be able to knock it off your taxes anyway (provided congress doesn't touch the current tax code).
2) .05% is a pretty negligible amount of interest even on a jumbo loan.
3)$50 PMI will go away once you get the loan to value amount to just over 18% (20% is the general rule, but the technical amount is something like 18.577289%)

my thoughts: pay less now. who knows, you may move and end up with another loan (the average 30 year loan only sticks around for 7 - 8 years before its refinanced), so if you need the cash flow now, go with the upfront lower payment. i could go on about time value of money and earnings potential increases but that's all blah blah blah i'm a CPA shoot me i'm boring.

 

[Pesqueeb]

I went with B of A for my first home loan in Virginia.
Never again.

Personally, I would do everything to avoid dealing with BOA.

Brian Moynihan can choke on a bag full of hairy cock.


I have nothing to add that hasn't already been said. Solid advice.

 

[bizutch]

I'd avoid the monster lenders. If you like going into a big queue of people when you have a question, do it to it.

I'd really recommend finding either a local credit union or a regional bank specific to your area that you know you'll be able to walk in to the door of and negotiate with if you ever have problems.

Knowing what I know about banks, I'd also recommend State Farm Bank. They hold their notes and do not sell them.

If anybody has ever mailed a payment in to their bank only to find out their loan was sold, the money gets mailed back to you and you have to chase down why and where your credit may have gotten dinged in the process....you'll appreciate that.

 

[CrabJoe StretchPants]

3)$50 PMI will go away once you get the loan to value amount to just over 18% (20% is the general rule, but the technical amount is something like 18.577289%).

Pretty sure it's 78% equity......at least that's what I've been told all along, including a letter I got in the mail the other day.

 

[Sandwich]

i'd have to know the balance that you are borrowing on to do a true calc (not asking you to share) BUTT

thangs to consider:
1) PMI ain't tax deductible, mortgage interest is if you itemize, so the higher mortgage interest amount really won't amount to much, and you'll probably be able to knock it off your taxes anyway (provided congress doesn't touch the current tax code).
2) .05% is a pretty negligible amount of interest even on a jumbo loan.
3)$50 PMI will go away once you get the loan to value amount to just over 18% (20% is the general rule, but the technical amount is something like 18.577289%)

my thoughts: pay less now. who knows, you may move and end up with another loan (the average 30 year loan only sticks around for 7 - 8 years before its refinanced), so if you need the cash flow now, go with the upfront lower payment. i could go on about time value of money and earnings potential increases but that's all blah blah blah i'm a CPA shoot me i'm boring.

395k, 5% down, 4.193 as of today, other was 4.125%. PMI was 147$ for the higher, and 209 for the latter.

Based on my badmaths, it looks like about a 40$ a month difference for up to the first five years (whenever PMI goes away). That's about 2100. The difference in the loans at that rate is about $4000 or so. So, 2100 over 5 years is better than 4000/30yr, in my opinion.

Neither is local, although both reps are (one is a broker, so who knows who will buy the mortgage). I'm not affiliated with any bank to use their services except bofa, and they suxx right now.

Any help would be appreciated. I'm still leaning towards the flagstar/4.19 (varies based on the 10yr bond rate)/low PMI vs. the lower/higher broker.

 

[OGRipper]

I went with a regional bank (First Republic) that matched the best mortgage rate I could find, reimburses ATM fees, and offers a pretty decent rate on savings. In doing so I moved away from banking with Chase, and I am super happy so far.

I mean, I actually know my banker.

 

[dan-o]

I'm not affiliated with any bank to use their services except bofa.

That doesn't matter.
The only thing you'll miss out on is the direct-deposit discount, but you can open/maintain an account just for that purpose if you want to.

 

[clarkenstein]

Based on my badmaths, it looks like about a 40$ a month difference for up to the first five years (whenever PMI goes away). That's about 2100. The difference in the loans at that rate is about $4000 or so. So, 2100 over 5 years is better than 4000/30yr, in my opinion.

i'm mentally defunct today, but right now i'm with you. i'm going to get another cup of coffee and back of the napkin it again, but if i were you, i would be doing what you are doing.

 

[clarkenstein]

Pretty sure it's 78% equity......at least that's what I've been told all along, including a letter I got in the mail the other day.

and this is right - i was wrong. the 78% level is when PMI should automatically drop off. you can request to have PMI dropped earlier from your lender, but that doesn't always happen.

 

[Sandwich]

OK sports fans.

My dick lender over at fragstar miscalculated the PMI. Both lenders are equal now. He's going to try and see if he can match the other guys rate, which I lied and said was 0.1% lower (it's .05%). Should I even bother? Part of me thinks if he's that incompetent, what else will he mess up? Still, 4.09% beats the other guy, and less money = more happy.

 

[clarkenstein]

OK sports fans.

My dick lender over at fragstar miscalculated the PMI. Both lenders are equal now. He's going to try and see if he can match the other guys rate, which I lied and said was 0.1% lower (it's .05%). Should I even bother? Part of me thinks if he's that incompetent, what else will he mess up? Still, 4.09% beats the other guy, and less money = more happy.

that sucks. that's why i am a fan of having an attorney review docs at closing. there's too much to get screwed up.

now that your PMI is the same, shoot for the lower rate provided closing costs/fees are comparable.

 

[Sandwich]

that sucks. that's why i am a fan of having an attorney review docs at closing. there's too much to get screwed up.

now that your PMI is the same, shoot for the lower rate provided closing costs/fees are comparable.

yeah we haven't locked him in yet, so we can use the other guy if he can't beat the rate.

closing costs are estimated to be within 20 bucks of each other. One guy's is higher but he has more discounts, the other guy's is just straight up low, and I think there may be an additional discount, but all in it's close.

 

[clarkenstein]

yeah we haven't locked him in yet, so we can use the other guy if he can't beat the rate.

closing costs are estimated to be within 20 bucks of each other. One guy's is higher but he has more discounts, the other guy's is just straight up low, and I think there may be an additional discount, but all in it's close.

which ones better, the french toast, or the french toast?

you're almost at a flip the coin point. any of the lenders ride? if so, go with that one.

 

[TN]

I knows a guy, who knows a guy, who gots a guy....his name is Tony or something....

 

[bizutch]

I went with a regional bank (First Republic) that matched the best mortgage rate I could find, reimburses ATM fees, and offers a pretty decent rate on savings. In doing so I moved away from banking with Chase, and I am super happy so far.

I mean, I actually know my banker.

People will only learn how awesome this is when their big bank gets bought, buys another, sells their mortgage or any other thing that involves anything bad...which is most everything.

 

[MTB_Rob_NC]

People will only learn how awesome this is when their big bank gets bought, buys another, sells their mortgage or any other thing that involves anything bad...which is most everything.

Or when your small regional bank fails and goes out of business.


Problem Bank List

http://cr4re.com/PBL07292011.html

 

[SkaredShtles]

We just went with a trusted mortgage broker... whoever originated the loan sold it within the first 60 days. BOA now services the loan - which has been fine so far.

 

[Sandwich]

went with the broker. he gave us about 1000 bucks towards closing costs to seal the deal. and his rate is the lowest available @ 4.125. so yey.

 

[bizutch]

Or when your small regional bank fails and goes out of business.


Problem Bank List

http://cr4re.com/PBL07292011.html

Heh. Yeah, but then you just wind up with one of the behemoths.

When one behemoth jettisons you, game over.