topic Re: first mortgage loan, please help! in Mortgage Loans

first mortgage loan, please help!

Anonymous — Mon, 23 May 2016 16:36:23 GMT

So I am having trouble deciding which lending company to use. This is my first home purchase. My credit scores are 680/681/733. It is between 2 companies and here is what they are telling me:

Company #1: Willing to offer 3.9% conventional loan. Say that the rate is an estimate and subject to change once I have the home under contract.

Compnay#2: Willing to offer 3.75% conventional loan.

When I asked company #1 to match the other company, they said my score is too low to offer me that rate, and that company 2 will just jack up my rate once I have the home under contract, and that it is common practice for lenders to offer a lower rate during pre approval only to have it increased later.

Which company should I trust? They are both telling me different things and its hard for me because this is my first experience with a mortgage loan. Thanks in advance!!

Re: first mortgage loan, please help!

Anonymous — Mon, 23 May 2016 17:06:04 GMT

My guess is they will both tell you your rate is going to be higher. 3.9% is closer to what you would qualify for with a 681 mid score. They might be able to do that and just eat the cost. A lot of lenders will tell you qualify for a lower rate just so you go with them and then once you are into the process will switch it on you. Ask each of them what your par rate would be. I can price it out for you if you let me know what your purchase price is and then I can tell you how much you would have to buy down the rate to get to each of those rates. Again every lender is different and might be willing to eat the cost to get you a lower rate if it earns your business and the loan size is big enough. You are kind of on the lower end as far as credit score goes for conventional so I would expect the rate to be higher since conventional is much more sensitive to credit score. Also how much are you planning to put down and are you a veteran by any chance?

Re: first mortgage loan, please help!

Anonymous — Mon, 23 May 2016 17:24:11 GMT

@Anonymous wrote:
My guess is they will both tell you your rate is going to be higher. 3.9% is closer to what you would qualify for with a 681 mid score. They might be able to do that and just eat the cost. A lot of lenders will tell you qualify for a lower rate just so you go with them and then once you are into the process will switch it on you. Ask each of them what your par rate would be. I can price it out for you if you let me know what your purchase price is and then I can tell you how much you would have to buy down the rate to get to each of those rates. Again every lender is different and might be willing to eat the cost to get you a lower rate if it earns your business and the loan size is big enough. You are kind of on the lower end as far as credit score goes for conventional so I would expect the rate to be higher since conventional is much more sensitive to credit score. Also how much are you planning to put down and are you a veteran by any chance?

Hi, not a veteran. Looking to put down 20% on a 225k purchase. I want conventional over FHA becasue even with the higher interest rate, I'm paying less without the MI that fha charges. Just don't know who to trust since the one company is telling me definatley 3.75%, and the other company is telling me they will jack it up on me.

Re: first mortgage loan, please help!

Anonymous — Mon, 23 May 2016 17:47:54 GMT

I priced it our for you and your par rate would be 4.5% on conventional. Each lender is different though but 3.75% seems like a big jump for it to be their par rate. Lenders can change their margins so it could be possible. We mainly focus on VA loans so our conventional rates aren't always the best. what I would do is ask each lender to send you a screen shot showing what their par rate is so you know that they are telling you the truth. Again though there might me a buy down and they might be willing to eat the cost to get you that rate. Let me know if you have any other questions.

Re: first mortgage loan, please help!

Anonymous — Mon, 23 May 2016 17:57:49 GMT

@Anonymous wrote:
I priced it our for you and your par rate would be 4.5% on conventional. Each lender is different though but 3.75% seems like a big jump for it to be their par rate. Lenders can change their margins so it could be possible. We mainly focus on VA loans so our conventional rates aren't always the best. what I would do is ask each lender to send you a screen shot showing what their par rate is so you know that they are telling you the truth. Again though there might me a buy down and they might be willing to eat the cost to get you that rate. Let me know if you have any other questions.

thanks for the reply. so is my "par rate" different from the rate they are quoting me at?

Re: first mortgage loan, please help!

Anonymous — Mon, 23 May 2016 18:38:05 GMT

Par rate means there is no buy down to get that rate or no credit to give you to go towards closing costs.

Re: first mortgage loan, please help!

Anonymous — Tue, 24 May 2016 02:09:48 GMT

Ask them to show you the quotes as of today in their pricing software. Whichever shows you, go with them.

Re: first mortgage loan, please help!

Anonymous — Tue, 24 May 2016 15:43:31 GMT

@Anonymous wrote:
Ask them to show you the quotes as of today in their pricing software. Whichever shows you, go with them.

The one company is Caldwell Banker. They are telling me they can give me a better rate because the other company is a secondary lender and they would just sell the loan to a company like theirs. Is this accurate? Should I go with Caldwell. The agent assured me that he can offer me 3.75% or below.

Re: first mortgage loan, please help!

Anonymous — Tue, 24 May 2016 16:24:04 GMT

@Anonymous wrote:
@Anonymous wrote:
Ask them to show you the quotes as of today in their pricing software. Whichever shows you, go with them.
The one company is Caldwell Banker. They are telling me they can give me a better rate because the other company is a secondary lender and they would just sell the loan to a company like theirs. Is this accurate? Should I go with Caldwell. The agent assured me that he can offer me 3.75% or below.

Coldwell Banker is a real estate company, so I'm assuming it was a lender that is working inside of the real estate office (this is called an MSA). I would still ask for the printout. If rate is very important to you or if you suspect the LO is being less than honest, say something like "can you please show me a printout of the rate I would receive today from your pricing engine based on my current information and loan product?"

Re: first mortgage loan, please help!

RonM21 — Tue, 24 May 2016 21:09:14 GMT

Getting a print out is a good suggestion. This would give you the info you need without any games being played....hopefully.

Re: first mortgage loan, please help!

StartingOver10 — Wed, 25 May 2016 16:08:33 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
Ask them to show you the quotes as of today in their pricing software. Whichever shows you, go with them.
The one company is Caldwell Banker. They are telling me they can give me a better rate because the other company is a secondary lender and they would just sell the loan to a company like theirs. Is this accurate? Should I go with Caldwell. The agent assured me that he can offer me 3.75% or below.
Coldwell Banker is a real estate company, so I'm assuming it was a lender that is working inside of the real estate office (this is called an MSA). I would still ask for the printout. If rate is very important to you or if you suspect the LO is being less than honest, say something like "can you please show me a printout of the rate I would receive today from your pricing engine based on my current information and loan product?"

^+1

I would be wary of a company that promises 3.75% when you don't have a contract. Remember an interest rate can't be locked without a purchase and sale contract. You can get today's rate as stated above, but no rate can be locked without the contract.