The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: TimmyTightWad on December 22, 2014, 07:46:12 AM
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Hello All,
I am looking to purchase a home between now and June so I've began shopping for loans. So far my experience has not been pleasant. I have tried LendingTree and another guy who was recommended to me. So far my experience has lead me to characterize these mortgage brokers/lenders as being comparable to used car sales men. People calling me incessantly at first, taking my information, then not getting back to me for multiple days, then giving me preapprovals with out mentioning any terms of the loan...that kind of thing. I have 6 figure income,780+ credit score, and 30k+ to put down so I assumed this process would go smoothly, but that hasn't been the case. Is it safe to assume LendingTree sucks? Where might I look to find good options to secure this loan?
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This process sucks basically -- Remember this -- If you go through a local broker or bank (which I suggest) you'll have more hand holding.
You are a golden customer with your score and income. You might send out a note to several area brokers and banks. Tell them you want the best interest rate with the lowest points and charges. Pick two that seem honest and hard working to begin the bidding process. Almost all the rates are negotiable to a degree. They will act like they are not though.
I'm assuming your looking at houses in the $140K range? And don't forget to keep a reserve of around 10K for repairs and improvements etc...
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I'm searching in the 400k and under range. I'm explicitly asking for loan options that either minimize or eliminate PMI (80/10/10 or lender paid PMI). I think that's one of the reasons why people haven't been getting back to me.
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I would recommend talking to Pentagon Federal Credit Union (penfed.org).
You have to make a small donation to a military charity to become a member, but I haven't seen better rates anywhere. I opened an equity line of credit and refi'd to a 15 year at 3% this year remotely in Texas and everything was very smooth.
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I would recommend talking to Pentagon Federal Credit Union (penfed.org).
You have to make a small donation to a military charity to become a member, but I haven't seen better rates anywhere. I opened an equity line of credit and refi'd to a 15 year at 3% this year remotely in Texas and everything was very smooth.
+1. I got their 5/5 ARM and my rate is 2.5%
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+2 for PenFed.
Their rates are very competitive and they offer a truly unique "Real Estate Rewards Program" ( https://www.penfed.org/Real-Estate-Rewards/ ). I have used this program to purchase two homes and to sell my previous home. When selling your home you will get a partial commission refund (nice!) but when buying you will be able to get your closing costs covered for certain mortgages. I did the 15/15 mortgage earlier this year and only had to pay for title insurance and the home inspection. All other fees were covered by PenFed which ended up being multiple thousands of dollars.
Note that PenFed will appoint you a Realtor in their network in order to participate in the program. Also note that if you sell or refinance within 3 years you would have to pay a prorated portion of the closing costs back to PenFed.
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I am looking into PenFed now for a preapproval. The rates seem VERY low, but the closing cost also seem very high. My credit union had similarly high closing cost but the rates were a bit higher. Hopefully they (PenFed) contact me soon. I'm trying to do a piggyback or no PMI loan so hopefully they can help me out with that.
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It's actually surprising no one has questioned the $400k range for the home, especially given the relatively small percentage down ($30k or so, so maybe 10%). Where are you looking to buy? Would understand $400k in most big cities, not as much in suburbs or rural areas.
Also, in your situation, I would generally recommend focusing on improving your Mustache, saving as much as you can of that six figure income and put down something closer to $100k after a year of saving, but in today's market with interest rates low, I would understand a little concern that interest rates may go up some in the next year.
When we did it, we trusted the referral of our agent, which worked out fine but it became apparent late in the game that you have to play lenders off of each other to get the fees reduced and terms improved. Our lender backed off of a number of line items when we showed them a competing offer.
Since we bank partially with Chase, it was tempting as well to take their offer since they offer 1% back on the mortgage if you're a Chase customer. Doesn't mean you shouldnt take the other offer if it's better elsewhere, but I bet other lenders offer deals like that.
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I've been preapproved for $450k. That's not my real range per say, just the max I can get. MY ideal amount would be less than 250k in reality. But I might be willing to go up to 350Kish for the right house. I'm in the Philadelphia/Lower Merion region.
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Ah, pricey area! My S.O. and I plan to find a house North of 76/276 and do not want to go above $250k. Btw, have you checked out PSECU? My mortgage is with them and I'm in the middle of a refinance (house is now a rental property, refi from 15 to 30 year to lower payment and put the excess into long-term investments). Closing costs will be around $3400 but that includes 1.75 in points that I have to pay since it's an investment property.
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I am looking into PenFed now for a preapproval. The rates seem VERY low, but the closing cost also seem very high. My credit union had similarly high closing cost but the rates were a bit higher. Hopefully they (PenFed) contact me soon. I'm trying to do a piggyback or no PMI loan so hopefully they can help me out with that.
When I got my 5/5 mortage (About 10 months ago) they paid for all closing costs. Not sure if they are still doing that or not!
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yes maybe they will offer me a deal where they pay all or a portion of the closing cost, in the initial screens it's showing me closing cost of 15k+. The origination fee by itself is more than 3K (300K purchase price with 20% down..assuming I can get a piggyback loan for the last 10%)
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We used one of the online banks to refinance out house. We were a little concerned at first, but had a great experience. The entire process took only two weeks...
I think that dealing with someone in person provides you some comfort, but will cost you extra $$ most likely...
https://firstib.mortgagewebcenter.com/CheckRates
this will give you a pretty accurate estimate of what the rate would be.
Good luck!