OK, so I'm looking to get prequalified for a mortgage for my first home. I did this last year through a friend but he's no longer in the industry and frankly I'm not sure that he was the best choice anyway.
A few questions:
I can go out and search the internet and find who has the lowest mortgage rates in the country. Can I just approach the banks directly and apply for a mortgage through them, or do I need a broker?
If I can go to the banks directly, I assume I'll have to fill out the same paperwork over and over and they'll each hit my credit with a hard lookup. I guess with a certain number of hard lookups in the same period, that won't affect my credit adversely, but... the paperwork... eesh.
Is there a way to find a mortgage broker who already works with these multiple specific banks (online broker?) to save myself some headaches with paperwork and credit pulls?
Will banks do an 80/20 thing for 100% financing or do I need to go to a broker for that? I have maybe 5% in the bank but that's gotta cover everything. closing costs, insurance, legal, title, etc.
How long is a prequal good for? My last one never said.
Thanks!
Given that I am a Mortgage Consultant, let me try to help you out bud.
Stay away from online advertisements like Lending Tree. 9/10 they will claim to offer the best rates. However, there are always under lying factors they dont tell you. Such as, up front fees, buy down points, or discount points that get charged to you. They are kings of the bait and switch tactic. They bait you in with advertisements and miss quotes (incomplete good faith estimates). Then when it comes down to solidifying your home loan the terms change.
If you have a good relationship with your local bank start there for a quote. Yes they will pull your credit bureau. However, walk in banks only pull the EquiFax/Beacon bureau.
From there I recommend finding a wholesale lender / broker in your area who has a great reputation. You should get quotes from 3 different lenders/brokers. Do not be afraid of brokers if they are reliable and have good track history.
Credit reports. Yes you will have your credit pulled. Shopping with 3 different banks is just fine. Having your credit pulled 3 times is fine. Your scores will not drop, because the credit agencies will recognize that you are having your bureaus checked by mortgage lenders. They will basically treat it as one hit, so long as you have them pulled within a similar time frame. Should you have it pulled more than 3 times.....no. In addition, be sure to ask the loan officer that you deal with if their investors honor the credit report that they pull. If they do, then they can shop your loan only using one credit report and it wont be re-pulled every time the shop for you.
Yes banks will do 80/20 combo loans. However, with secondary interest rates being on the high side (for straight principle and interest), it is just as beneficials as getting 1 loan at 100% with mortgage insurance. Effective 01/01/07 mortgage insurnace is 100% tax deductible. If your account says otherwise he is wrong. I can gladly show you outline on this. In addition the single loan at 100% is probably lower then the blended rate on an 80/20 combo loan. Now if you want to do a second that is a HELOC (Home Equity Line of Credit), that changes things. All HELOCs are interest only. Granted that HELOCs just dropped 0.5% from 8.25 to 7.75%, just remember that HELOCS are fixed to prime. Meaning whenever the prime index rate changes, your HELOC rate changes. And I can tell with 90% certainty that the FED will not cut the prime rate the next session. It may go back up a quarter to 8.00%
Also, as a heads up stay away from CountryWide. I could write up 3 pages of why, but trust me. Right now your key investors in this market are Citi, Chase, Wells Fargo, 5/3, AmTrust, SunTrust, and Provident. I would try to find a broker that deals with Provident Funding Group. Their conforming products can not be beaten by anybody...period.
If you want more information, just let me know. I am not licensed in Massechusetts, so I cannot get you a quote. However, if you want me to look up back door rates and see if someone is raping you, let me know. So, long as they are an investor that I am setup with, I can check the wholesale rate sheets for you.
I hope this helps.
Nathan