NFCU 100% financing mortgage pre-approval

[Anonymous]

So, my first ever mortgage pre-approval came in today. Got the letter, and the closing cost estimate-which of course is really high. Approved for $300k @5.5%. Which, I still want to determine whether or not I can buy down that rate a bit, or not.

Also, I have read that their closing cost estimates are always really high-so when can somebody tell you how much it's really going to be? How can I negotiate with seller about closing costs, but not know how much it's giong to be?

Really excited about this, of course. The higher rate is offset, mostly, by not having to pay PMI. I guess I could also look at it as a lower effective rate when factoring in tax deductions for the mortgage interest. Not sure how to figure that out, though. Will have to look it up.

Anyway, appreciate any thoughts/feedback.

[nikkiheaven]

So you were approved for 100% financing with 656 mid score?  What will your payment be?

[Anonymous]

If I borrowed the max amount, would be $2081 total PITI according to their document. And obviously, it could be different-as I don' t know what type of rates they figure in to insurance and taxes.

 I don't intend to use the full amount, however. It was more of a "just in case" type of thing. I'd more more comfortable with around $1700, give or take, monthly. We are currently looking at houses between $240k-$280k.

[nikkiheaven]

And was your credit scores again?

[Anonymous]

I don't recall exactly, but I have the notice that showed the scores at my house, not at home right now. Mid 600 for mid score. It ended up being lower than the MYFICO mortgage scores showed though for sure. I think it was 636, 650, 672.

[_NERD]

Congrats. Yikes on the rate. We got pre approved this morning for 265,375. We are shopping for 240-250k to keep the payments low. Have you scheduled any home viewings yet?

Good luck!

[Anonymous]

We haven't scheduled any viewings of anything yet. We check online, we also have an MLS portal that our realtor set up for us based on our parameters.

Weird thing is, today I got an email that the LO said that she had all my docs-pay stubs, bank statements, W-2s. I had stated my income a little higher on my application,  than what the actual income was from their verification of employment. So, they were lowering my approval to $275,000, and had to re-run it through UW again. This doesn't make sense-my actual W-2 docuement showed exact income, which I looked at with my own eyeballs as I was submitting the application. So I left her a voicemail asking for clarification. I wasn't intending on using the max. But it does provide flexiibility if there's a house at, say, $285k or whatever. A little frustrating, but it may turn out to be not an issue at all.

I am told that I can buy down the rate by paying a total of 1.75% of the loan- which is a 1% origination fee, and .75 points. This would buy down the rate to 4.5% for the life of the loan. So, I can't really complain about a half a point on an interest rate difference, with no down payment, and no PMI.

[_NERD]

That's if you intend to stick with that loan for a long time. One of our options would be to buy down to 3.0% from 3.625% for 11k, just to save around $100/mo. Ya no thanks, our LO doesn't advise that. We will buy down a bit but we'd rather put as much toward the down payment as possible.

[Anonymous]

To me, the down payment amount doesn't make enough of a difference to make it worth dropping down a much larger chunk of cash. Now, where it does benefit is if you have a loan that will give you a breakpoint on the PMI, like 10% down vs 5%, or what have you. Then it can make a difference. Otherwise in nominal terms, the difference between, say $10k in down payment is not beneficial.

Figure $10k extra down on a $275k house, at 3.625% is about $50/month. Again, sure, over the life of the loan, 30 years, can make a big difference. But would take you $10,000/$50=200 months to break even. If you have other debt, you may be better off (I should clarify not "you" specifically, but the non-personal you, ha), your likely better off using that $10k on something else.

[gr8bek]

Would you feel comfortable sharing your household income?