Rocket Mortgage vs Citibank

[cjane1]

I just got off the phone with Rocket and asked about the points, he said that the 4.375 was the lowest in the market with the points already included. I received a pre approval with Citi with an interest of 4.625 then shows discount points 1.125. Since I am new to this wouldn't it be smarter to take Citibank and pay down the points, or am I missing something?

[NC_Mtg_Loaner]

Always compare APRs and always on the same day.

[cjane1]

So don't take discounts to pay down interest into consideration?

[MauiMan85297]

Ask QL to send you a loan estimate so you know what you're buying down, if they're using the phrase that the 4.375 is points included then how much are the points (Line A of your LE will state this % and the cost amount).

[JVille]

RUN!! From both and go with a recommendation from your family, co-workers, RE Agent in your own community. A local Mtg Broker that you are comfortable with. Stay away from the Big Bank Loan Centers, the right hand and left hand have really bad communication with you and with each other.
Your Realtor will have 2 or 3 lenders who are proven to get the deal done in a timely manner.

[Zahnrosen]

Jville,

My local lender (referred from my agent who is a friend) is asking for a rate that seems high at 5% on a 683 middle FICO score. Why wouldn't I want to shop it around more?

[NC_Mtg_Loaner]

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@cjane1 wrote:

So don't take discounts to pay down interest into consideration?

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Compare the Annual Percentage Rates for each loan being offered and obtain your quotes on the same day so that neither lender has the advantage or disadvantage of more or less favorable market conditions.   This allows you to compare the costs of one offer where you pay points to buy the rate down and another without doing so on an "apples to apples" basis.

Then, you decide what's more important to you in the transaction.  

You may decide to use the Time Value of Money theory to help you decide what's the best deal, but that may not necessarily be ideal for you at this point in time.   For example, let's say you have limited funds at this point in time and while it is typically cheaper in the long run to pay points now in order to lower your loan costs what do you do if you don't have lots of extra money at your disposal today?   Or maybe you do, but you want to save those funds for renovations, window dressings or beer.....Fast forward a couple years down the road you'll have plenty of extra money.   

When you are buying a home you are deferring the cost of an appreciating asset at an incredibly low rate.   Chances are you might have other investment vehicles that might generate a greater rate of return than what you pay in costs (APR) on your mortgage loan.   

A mortgage loan is a mortgage loan and while you want "the best rate", don't obtain it at the cost of service or your satisfaction or peace of mind.  Find a lender that you feel you can trust--this way, when something 'unexpected arises' you'll have the confidence that your lender has got you covered.  

[cjane1]

We were given a quote from our credit union for 5% and our mid score is 715. I was a little suprised since we have been with them for years and was offered a higher interest rate.

[cjane1]

Jville,

I am hesitate with Rocket Mortgage due to he hasn't sent the pre-approval letter and I have already requested it twice, but wants me to send over our bank statements and of course tax returns and proof of income. Citi Bank seems more trust worthy at least they seem to be, they have sent me everything I've asked for but they do have the higher interest rate between the two. 

[NC_Mtg_Loaner]

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@cjane1 wrote:

Jville,

I am hesitate with Rocket Mortgage due to he hasn't sent the pre-approval letter and I have already requested it twice, but wants me to send over our bank statements and of course tax returns and proof of income. Citi Bank seems more trust worthy at least they seem to be, they have sent me everything I've asked for but they do have the higher interest rate between the two. 

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With all due respect, if you haven't shown your lender your assets, W2s, tax returns and proof of income yet, you wouldn't want to use whatever pre-approval letter they are offering you.