after 8 years of renting— we are finally buying a house debt

the house is on the same street we are currently renting but will save us at minimum $600 a month in fixed cost and we don't ever plan on selling it— it will be bequeathed to our children.

That said, we have quick 30 day close (next month) and initially used Realt***** Mtg Broker to get prequal'd

Now I am told that as long as she handles the deal— there will be no issues with funding.

She just called and is quoting us 4.25% 30 yr fixed 0 points — seems high as my Credit Union quoting 4% @ 0pts

She said FHA is 3.75% but then we would have to pay Mortgage insurance — WTF? We are doing 20% down

she said you can only get out of mtg insurance if you do a 15 year and put 22% down—— is this right?

Also, I was told because I am going conventional, that my appraisal will hit — for sure. (again WTF? if it is lower than I can negotiate down??)

So it appears there are still scamming going on so can someone currently in the industry give me some advice on not to get screwed and get the best APR

Thanks so much

Pm do_the_math with your number

She will be home in a few minutes

I have tried to send you her number but I get this message

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Hi Vegas, Gecko asked me to review this thread. It is impossible to comment on whether 4.25% is a good rate without knowing your credit score and loan amount.

As to going FHA with 20% down, I only do this when the credit is so bad that the borrower will not qualify for a FHA loan. In those instances, I usually recommend a 15 year to avoid or reduce the monthly FHA MIP.

As to not paying monthly PMI on conventional loans with less than 20%, I usually recommend the one time mortgage insurance premium. When I do this, I recommending increasing the rate slightly in order to give a credit to offset the upfront premium. The numbers actually work out better than most people realize. I'll usually go over the option when borrowers would be better off paying off excess debt and going with a 15 year loan. I also recommend it when it will deplete all assets and leave nothing for reserves.

What you should have your loan officer do is provide you with at least 3 rate scenarios that include payment and cash to close:

1) The lowest rate.
2) The rate with the lowest cost.
3) And the rate the loan officer recommends (usually in the middle of the road).

When deciding on an interest rate, consider comparing the payments, cash to close, and calculating recapture costs. Keep in mind that the lowest rate is not always the best deal especially if the money could be better spent on solar or in other energy efficient improvements. Gecko and I differ on the issue of energy independence. He says solar is a bad deal, but when I pick up a loan where the home has solar and a plethora of EEMs, I get downright giddy.

As to the 4.25 at par, it seems high. But again, I'd have to know the FICO, property type, and loan amount to be able to give an informed opinion. I suggest you ask what the lender paid compensation is, and since you are putting 20% down and can probably pay your own closing costs- request borrower paid compensation that is lower (or negotiated). Also, considering the high delivery fees on 30 day locks, you might want to discuss floating until you can do a 18 day lock.

I hope this helps. If you want to reach me at work tomorrow, please contact Gecko and he can give you my work number or cell.

Good luck, and I hope you got a really great deal!

Oh, and to answer your question on FHA, yes- your broker is right. You have to have 22% down and a 15 year loan to avoid annual MI, but the upfront MI will still be 1%.

Source:

http://portal.hud.gov/hudportal/document....

AND:

http://www.hud.gov/offices/adm/hudclips/....

Oh my gosh— Thanks you so much DTM!!!

I will PM you the detail info in just a bit
(have something I have to do right now)

DTM- your email is full or something as it is not letting me PM you.

I think karl broke PM's when he did an update earlier.

Uh, it should work unless their -- or YOUR - PM box is full.

You can't PM someone if YOUR box is full any more.

my mailbox isn't full and Geckogm had an issue emailing her as well.

Hmm.... try it now.

Works now— thanks Karl!

BTW- in full disclosure- I do feel we are over-paying for the house we are buying BUT
my list of demands for what we wanted /needed in a house narrowed our search down to almost nothing so when this house came up that literally fit every single thing —we jumped on it. It is also in one of the most desirable neighborhoods in this area.

Funny though—even though the house is on the same street we are currently living, our street is very long —it just so happens that this house is right next door to the lead organizer of the Tea Party out here she is excited to have me as her neighbor.

I want to publicly thank DTM so much for taking the time to talk with me! Your TF name definitely suits you!

On another note— not sure we are going to get this house — Inspector found standing water in the crawlspace and it has barely rained at all this year. There are also stains showing where it has flooded down there before and there is a french drain in front of the house.

I am so bummed as this house is perfect for us in that it fits all our needs — but danm— I don't think it would be good to purchase a house with water under it.