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I want a 30 year fixed mortgage w/ zero points and the lowest possible interest rate
I want the seller to pay for all of the closing costs
I don't want to have to pay PMI, upfront or monthly
I don't want to empty my entire savings account on a down payment (which is still nowhere near 20%)
And I don't want any hidden fees sneaking up on me at the time of closing.
Is that too much to ask?
[I also want my real estate agent to find me a short sale or foreclosure w/ 4 bedrooms, 2 level acres, an updated kitchen and a jacuzzi tub...but that's another story entitled "Veruca Salt, I want the world....I want the whole world!].
Loan shopping. It's on.
And I am learning quickly that it takes 5 conversations with 4 different lenders just to cut through a quarter of their B.S.
My strategy is to drain each of them individually, extracting as much information as possible and then use it against the next one when he contradicts or neglects to disclose something the other one told me. After a while, I figure I should be able to get down to the best possible deals for ME, not for them.
For instance - Lender B. will tell you the best he can do is offer 5 1/8% with points and 5 3/8% with no points -- and that was the lowest I would find anywhere.
Meanwhile Lender A. had already offered me 5 1/8% with NO points just 45 minutes earlier.
And p.s. in doing so Lender B just tipped his hat to show me how he and his "third party partners" make their commission off of me.
Shysters.
Then lender C tells you "they" (whoever this mysterious "they" are) passed new state guidelines that sellers can only pay up to 2% in closing costs and there is no way around that.
And an hour later Lender D calls and informs me of a program for 1st time buyers where the seller has "unlimited concessions to negotiate".
Takes about another two hours to expose the pros and cons of 3% down, 5% down, no % down, 80/20 financing, 100% financing, 95% financing , hidden recapture clauses, lender fees, and origination points (different from discount points) that they didn't mention the first go round.
It actually takes a lot more than this to make my head spin. I love this game. Even though they are behaving like vultures. I guess I don't blame them at all as they are probably not closing too many loans these days.
Of all the loans I've heard about thus far it looks like a conventional mortgage will work out best. UNLESS I can qualify for a USDA Rural Housing loan which is a new govt loan program that president Obama implemented as part of the recovery act for rural areas.
It basically guarantees 100% financing to first time home buyer direct w/ the government. Down payment is NOT required, there is no PMI, no points, sellers are free to pay closing costs as part of the negotiations and interest rates are in the low 5's.
The only caveat here is that it looks like my income may be too high to qualify....However - there is a chance that I may get lucky because of the fact that I was unemployed for the majority of 2009 and half of 2008 because this is the time period that they look at your adjustable gross income to determine eligibility.
It is quite possible then, that it could actually work out in my favor financially that I was laid off and did not collect a paycheck for an entire year. Imagine?
Got to love it when things come full circle, and when the reason for the things you couldn't understand before, suddenly becomes clear.
I would love to hear any other homebuying stories about what else to look out for.
emily the biker pug commented January 5, 2010 10:53 PM
Glad you understand all the BS. It don't take much to make my head spin.
I had a huge equity position and went for a conventional fixed rate morgage I probably paid more than I should but at least it is at my bank and so far they have not sold the mortgage to anyone else that can be a pain in the ass. I am sure they did not sell it off because of my large equity position, makes it a sure thing for them.
I am sure you understand better than me and will get better feedback too.
Tammy commented January 6, 2010 2:03 PM
Make sure you ask about the loan origination fee. That one crept up on us when we bought our house. They don't mention it at all during the discussions - you just see it there on the dotted line when you go to close. It's only about $500, which by the time you put down your down payment and pay your points doesn't seem like anything worth whining about, but if you can get it waived, I would make the effort!
macguy commented January 7, 2010 12:54 AM
one word of advice stay no run far away from the mortgage brokers. ;-)
test commented January 7, 2010 9:35 AM
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