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Mortgage Options

Mortgage Options

Old Oct 26th 2017, 1:21 am
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Default Mortgage Options

Hi I have some question in relation to getting a mortgage we have been in the US for 2 years and have credit scores so that isn't going to be a problem qualifying.
The question is deciding how to choose who to go with.

I bank with a credit union so naturally have been looking at rates with CU via shared branching and I have found one in the state that I'm looking at purchasing with competitive rates. However the realtor who will be showing me homes is trying to get me to go down the road of there "Preferred Lender" although I'm not likely to be buying one of there homes. But I need to prequalify with someone so that I can place an offer if I see something.

Can I switch after I prequalify with a lender without effecting my credit score and also do I need to have an attorney for closing?
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Old Oct 26th 2017, 4:15 am
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Default Re: Mortgage Options

When dealing with the amount of money involved, not to mention the paperwork, I wouldn't even consider trying to close without the services of a lawyer!

As for pre-qualifying, any loan application, whether it's for a cell phone or a house, requires a credit check, so yes, changing up WILL affect your credit score. I would guess that two years residence means your credit score would swing wildly with each application. I would be tempted to make an appointment with your CU's loan officer and ask for an estimation of the likelihood of acceptance. While not as cast iron as a pre-qualified offer, it would give you an idea of how to proceed. You could then decide of you want to pre-qualify or not.
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Old Oct 26th 2017, 4:37 am
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Default Re: Mortgage Options

At this time, as long as the interest rate is less than 5% you doing are ok. The realtor has nothing to do with the loan, unless they are getting you much better than 5%!

eta I disagree with almost everything Guindalf said.

Last edited by RICH; Oct 26th 2017 at 4:47 am. Reason: add
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Old Oct 26th 2017, 4:49 am
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Default Re: Mortgage Options

All realtors have preferred lenders. Sometimes it's a you scratch my back type arrangement and other times it's people they've worked with in the past that they know wont screw up. I wouldn't trust any realtor though. Remember they don't get paid unless you buy something. And it's not in their best interest to get you a good price as they are percentage commissioned in fee.

When we bought a house here we went with Chase and the guy handling it was bloody useless. Don't assume anyone knows what they're doing. Most people don't.

As to an attorney I would also say yes. We didn't use one as our realtor told us we didn't need one, and it was all straightforward.
A year later we found termite damage and dry rot. Working back through the paper trail we saw the vendor had dropped termite clearance from the contract days before we closed. Our greedy bstard realtor never pointed this out and being green we just signed. Cost me over $15k a year later to fix up.
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Old Oct 26th 2017, 4:51 am
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Default Re: Mortgage Options

Originally Posted by Guindalf View Post
When dealing with the amount of money involved, not to mention the paperwork, I wouldn't even consider trying to close without the services of a lawyer! ....
That depends on the state, not all states use lawyers for closing real estate deals.
... As for pre-qualifying, any loan application, whether it's for a cell phone or a house, requires a credit check, so yes, changing up WILL affect your credit score. I would guess that two years residence means your credit score would swing wildly with each application. I would be tempted to make an appointment with your CU's loan officer and ask for an estimation of the likelihood of acceptance. While not as cast iron as a pre-qualified offer, it would give you an idea of how to proceed. You could then decide of you want to pre-qualify or not.
Pre-qualification is different from pre-approval.
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Old Oct 26th 2017, 12:47 pm
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Default Re: Mortgage Options

Thanks
Its pretty much as I thought nobody is really looking out for my interests and they always recommend there friends to give them pay days as well.
And because the rates don't vary that much no incentive to use who they recommend.
Is it legal for builders to say they will pay closing cost but with there preferred lenders?
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Old Oct 26th 2017, 2:20 pm
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Default Re: Mortgage Options

Originally Posted by Lanyu View Post
Thanks
Its pretty much as I thought nobody is really looking out for my interests and they always recommend there friends to give them pay days as well.
And because the rates don't vary that much no incentive to use who they recommend.
Is it legal for builders to say they will pay closing cost but with there preferred lenders?
I don't know for sure, but it wouldn't surprise me if it was perfectly legal. They'll be getting a big enough referral fee from the lender to cover their costs and you will need to watch out for the mortgage deal and make sure it is competitive.

Saying all that, from what I've seen here in Austin, the builders just want the houses sold asap and will offer really good deals to get them off their hands. So, it could be a great deal. In this case, I would get a lawyer to look out for your interests.
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Old Oct 26th 2017, 3:09 pm
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Default Re: Mortgage Options

Originally Posted by RICH View Post
At this time, as long as the interest rate is less than 5% you doing are ok. The realtor has nothing to do with the loan, unless they are getting you much better than 5%!

eta I disagree with almost everything Guindalf said.
You should really be looking for under 4% without points. My preferred mortgage provider does not lend in Louisiana , but MS is quoting 3.875% with some cash back on new purchase.

Capital One will give you a pre-qualification letter without doing a credit check.

https://www.capitalone.com/home-loan...y-for-mortgage
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Old Oct 26th 2017, 3:47 pm
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Default Re: Mortgage Options

Can one obtain a mortgage on property in one state while the financial institute only has offices in another state, i.e. the credit union?

If you default on the mortgage would it not be more difficult for an out of state financial institution to foreclose and take over the property for resale than an institution with an office in that state?
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Old Oct 26th 2017, 3:50 pm
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Default Re: Mortgage Options

Originally Posted by Rete View Post
Can one obtain a mortgage on property in one state while the financial institute only has offices in another state, i.e. the credit union?

If you default on the mortgage would it not be more difficult for an out of state financial institution to foreclose and take over the property for resale than an institution with an office in that state?
I thought most lenders sell the mortgage on anyway so the lender you go to doesn't necessarily service the mortgage. Might that get round the issue?
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Old Oct 26th 2017, 3:51 pm
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Default Re: Mortgage Options

Originally Posted by Rete View Post
Can one obtain a mortgage on property in one state while the financial institute only has offices in another state, i.e. the credit union?

If you default on the mortgage would it not be more difficult for an out of state financial institution to foreclose and take over the property for resale than an institution with an office in that state?
I think the provider has to be licensed in the State in which the transaction takes place. That would be my understanding. The transaction would take place in the state the property is located.


This License is required of any company, LLC or sole proprietorship, regardless of location, who directly or indirectly, for compensation or the expectation of compensation engages in “Residential Mortgage Lending Activity” as a mortgage broker, mortgage lender or mortgage servicer. It also included mortgage lenders that only engage in funding loans originated by licensed mortgage brokers and originators commonly referred to as a “Wholesale Lender.” The wholesale lender has no originators and does not engage in retail originations.

https://mortgage.nationwidelicensing...spx?StateID=LA

Last edited by mrken30; Oct 26th 2017 at 3:55 pm.
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Old Oct 26th 2017, 6:24 pm
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Default Re: Mortgage Options

Originally Posted by mrken30 View Post
You should really be looking for under 4% without points. My preferred mortgage provider does not lend in Louisiana , but MS is quoting 3.875% with some cash back on new purchase.

Capital One will give you a pre-qualification letter without doing a credit check.

https://www.capitalone.com/home-loan...y-for-mortgage
Thanks that's the rate the broker mentioned but said between that and 4% he need to run a credit check not sure about points though.

I'm not looking to buy in Louisiana but I know here I don't think you need a Lawyer. As when I was looking there was no mention of it when realtor explained the process, But not sure if its required in GA where I'm looking to purchase wasn't sure if he just added it to get more money.
Its so annoying your suppose to be happy & excited when trying to buy but instead you're constantly worrying about being screwed over!
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Old Oct 26th 2017, 6:49 pm
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Default Re: Mortgage Options

A couple of things: a prequalification and a preapproval are different things - one is quick check that you are the sort of erson that should qualify for a mortgage, and does not include a credit check. A preapproval is basically a jump-start on the mortgage processing, so digs a lot deeper into your personal finances and does include a credit check.

Also, almost all retail mortgages in the US conform to one of several identical standards, so you are basically buying the same product whether you go through a broker, a CU, or a bank. The difference in rate affects how much the originating broker/ bank can sell the mortgage for. For example, if a $100,000 mortgage has a 4% interest rate then a $100,000 mortgage with a 5% interest rate, if the borrower has the same risk, would be worth $125,000. A risker borrower would reduce the value.

Banks and CUs will often lie about what happens to the mortgage after you complete the process. Banks will often retain the "servicing rights", meaning that is where you mail your check, or pay on-line, or in a branch. To many people this means that the bank still owns your mortgage, and the bank will often tell you that they are retaining the mortgage, but that is very rarely true. In almost all cases the mortgage is sold, and the bank just handles the front end admin of collecting payments, taking their fee, and passing on the proceeds each month to the new owner of the mortgage. A mortgage through a broker is always sold, and you will be told shortly after closing which bank/ service agent to send your payment to. It will typically be on of the large banks.

Last edited by Pulaski; Oct 26th 2017 at 6:52 pm.
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Old Oct 26th 2017, 7:36 pm
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Default Re: Mortgage Options

Originally Posted by Pulaski View Post
Banks and CUs will often lie about what happens to the mortgage after you complete the process. Banks will often retain the "servicing rights", meaning that is where you mail your check, or pay on-line, or in a branch. To many people this means that the bank still owns your mortgage, and the bank will often tell you that they are retaining the mortgage, but that is very rarely true. In almost all cases the mortgage is sold, and the bank just handles the front end admin of collecting payments, taking their fee, and passing on the proceeds each month to the new owner of the mortgage. A mortgage through a broker is always sold, and you will be told shortly after closing which bank/ service agent to send your payment to. It will typically be on of the large banks.
In California, at least, you must be notified if your loan is sold. My current loan was sold almost immediately to Fannie Mae, but the bank - as you point out - still services the loan.
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Old Oct 26th 2017, 9:18 pm
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Default Re: Mortgage Options

Originally Posted by Giantaxe View Post
In California, at least, you must be notified if your loan is sold. .....
I suspect that most people ignore the notice, think it is junk mail, or don't understand it - reinforced by the fact that the payment instructions don't change.
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