NJmom
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Member since 8/05 4987 total posts
Name:
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need help comparing mortgages
i need to choose a mortgage company asap. we were pre-approved by 3 places. what's the best way to compare which one is best. obviously we want the lowest rate, but if the rate is the same is the good faith estimate enough to know which is the better deal?
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: need help comparing mortgages
you have to put them side by side. Sometimes different banks/mortage companies bury fees. That's why you need to put them side by side.
Just because the rate is lower doesn't mean you aren't paying points on the other mortgage to buy down the rate. Break it down with a fine toothed comb to figure out exactly what you are paying.
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tann22
LIF Adult
Member since 6/05 2421 total posts
Name:
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Re: need help comparing mortgages
The combination of the following should be should be somewhere between $750 and $1000 dollars.
Application fee
Origination fee
Administrative fee
Commitment fee
Underwriting fee
Processing fee
You may see others, I just can't think of them right know.
You will also need to consider the following, which in most cases you may need to pay regardless of what bank or broker you use.
Appraisal fee (could be negotiated like the fees above).
Survey (you may not need to pay this one. This all depends on the findings of the title search company).
Just about every other fee (mortgage recording, taxes, escrow, title, bank attorney, your attoney, etc.) you will need to pay no matter who you use. You will find very little variation from in these costs from bank to bank.
Points are a whole different story and perhaps best left as a separate topic.
Of the bank (negotiated fees) if you’re paying only $750.00 you’re doing well. If you paying more the $1,000 they better be offering the lowest rates of all of the banks you are comparing.
Consider this, my bank Chase is offering a $1000 rebate towards closing cost (can be applied to anything) and only charging a $395.00 non-refundable application fee and a $300.00 processing fee. We would have to pay $100.0 for the appraisal which is very low. Technically, at closing we would net $200.00 from the bank. We’ll guess what, we decided to pay $1,050 in fees to Wells Fargo and go with them.
The main reasons:
Better rates (we did a 75/20/5)
Pre-approval on the phone is 20 minutes including a letter of approval.
Lo-documentation = less hassle (they have actually tighten up their requirements).
Well versed and knowledgeable banker. We were getting definitive answers from him rather than the typical “let me look into it for you” or “let me get back to you on that”.
The Mortgage banker ran about 15 different financing scenarios on 5 separate requests.
BTW - I would recommend my Mortgage Banker (and Attorney as well) to anyone.
The bottom line:
In the long run getting the lower rates was the most important thing to me. The $1250 ($1,050 up font and the $200 I’m giving up form Chase) I’m paying Wells Fargo will be made up in about 18 months as a result of lower payments. And for the reminder of the loan I will continue to have lower payments.
If it helps you in any way here is the current breakdown (as of today) from Well Fargo.
75% loan – 6.125%
20% loan – 8.375%
5% down payment
I will probably be locking in sometime this week.
Chase was coming in at 6.25% & 9.0% respectably.
The difference: $65 per month. In 15 months the $1,050 will be paid for and going forward from that point, my mortgage will continue to be lower by $65 per month.
BTW – It took about two weeks to workout all of the different scenarios and about 30 separate calls. I tried to work with Chase (my bank) by speaking with 3 different Chase Mortgage Bankers and all fell short of expectations.
I’m not sure if this helps you in any way. The illustration above is specific to my circumstances, but if you can use it as a barometer or find something useful in it, that’s great.
Good luck!
Message edited 4/24/2007 10:00:01 PM.
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