Loan Officer out of line?

[Its_Me]

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@ezdriver wrote:

Not enough information shared by the OP for me to render a meaningful response. For example:

1) Conventional or FHA or VA or USDA? FHA

2) LTV? 90% - putting 10% down

3) Mortgage middle score? 687

4) Was the quote on a specific property? No, general small area

5) Is OP in a position to lock that rate? If not, the rate quote is meaningless. No - but the point was comparing it to the 4% rate quote given at the same time and that LO's comments regarding the credit unions interest rate.

I'm a sales counselor with a national builder and our mortgage company has not posted rates that low for over 12 months. I think that you were provided a rate that you cannot lock.

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[dccordell]

Were both quotes for FHA loans? The way it is typed, it seems that first quote was for FHA (lower rate) and the second was a conventional 30yr fixed?

[Its_Me]

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@dccordell wrote:

Were both quotes for FHA loans? The way it is typed, it seems that first quote was for FHA (lower rate) and the second was a conventional 30yr fixed?

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Both were FHA 30 year fixed.

[Anonymous]

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@frugalQ wrote:

When do you close?

Two things to consider:

1)  until you lock your rate, there's a chance that it will go up.  With the 3.375% rate, are you paying points?  It seems low....and I would be cautious of it until you actually lock it in.

2)  The other lender is required by law to give you a GFE within a certain number of days of pre-approval.  I woudl be leary of anyone who wanted to do business with me but can not provide a detail breakout of the fees.

Good Luck!

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Frugal, a GFE is required to be provided within three days of receiving an application. We can provide an estimate based on sales price up front, but until we get an application (with a property address so we can accurately quote fees) there is no GFE requirement.

[frugalQ]

if the credit union published rates were different and you haven't locked, then you will more than likely get the new rate vs what's on the gfe.

[frugalQ]

thanks dpeezy!  i didn't realize that there wasn't a property until after i posted.  yeah...you really can't estimate anything unless you have a property cost.

[Its_Me]

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@frugalQ wrote:

if the credit union published rates were different and you haven't locked, then you will more than likely get the new rate vs what's on the gfe.

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The rates published at this moment are higher because they went up this week. The rate I was initially quoted was the same as the published rates, at the time I applied. I do understand that the rate I was quoted is not the rate I will necessarily get. I can't lock the rate until I go in contract. 

I guess my concern was this other LO who can't seem to understand how the credit union could offer this rate because his rate at that same time was 4% for the same type of loan with no points. I don't understand his motive. 

[Anonymous]

Good luck with the CU rate.  I just locked today at 4.125%.  I could have gone 4.0% or even 3.875% but I chose the higher discount points because my credit continues to climb and I plan on doing a refi next year and switching to a conventional due to my personal circumstance.

The CU rate could be legit however; it would have to be a 5/1, 5/5 or some crazy APR or points for them to be offering that today.  IMO.

[Its_Me]

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@Anonymous wrote:

Good luck with the CU rate.  I just locked today at 4.125%.  I could have gone 4.0% or even 3.875% but I chose the higher discount points because my credit continues to climb and I plan on doing a refi next year and switching to a conventional due to my personal circumstance.

The CU rate could be legit however; it would have to be a 5/1, 5/5 or some crazy APR or points for them to be offering that today.  IMO.

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The rate was from last week. They were up to 3.625 yesterday. I haven't checked today.

[StartingOver10]

I think the CU rate is closer to current market rates for FHA loans - at least here in my area. The 4% is a touch high - but sometimes LO's build in a buffer IME.

Quick Illustration:   I had one of my clients have a pre-approval with a LO with a mortgage co in Feb 2015 and that LO provided verbal info only, nothing in writing. Their rate was higher by more than 1/2% on a VA loan Their closing costs were substantially higher too - don't remember exactly at the moment but it was around $4k higher.  I had my client check out one of my lenders and both the rate and the costs came in much lower ($4k lower and 1/2 point less on the rate). My client went with my lender rather than the other one.  However, when I notifid the other lender, the LO said (paraphrase) - 'Why didn't you talk to me earlier, I could have dropped the rate and the closing costs'.  Naturally my buyer was wondering why they just didn't quote the lower rate and costs from the beginning.

I don't think the CU's rate is abnormally low from what I see here right now in my market for FHA rates. It will continue to float until you get a property and lock in as others have pointed out.

i wonder about the other LO - yes he is not under any obligation to provide a GFE but what is stopping him from providing a written Closing Costs Worksheet which contains the info the OP needs? Personally, if they don't provide their costs in writing, that is when I find it suspect.

EDIT:  I love bankrate.com and use them alot. However, the rates are general market rates and you are far better off getting a specific quote from specific lenders like the OP has done. I would not rule out the CU at all -