Profile picture for JohnSaldivar

FHA Loan question

My wife and i have been pre approved through a broker for an FHA loan for 350000 at 5.75%, I heard it is better if you shop around for a better loan,was thinking of doing this online , is there any websites that you recommend to get pre approved. Lending tree, Quicken ect...

  • March 29 2011 - Pinole
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Answers (10)

Yes, you can shop a few lenders and ask for a good faith estimate, GFE, to compare rate and terms. That rate is high although if your doing the FHA CHF Access half percent down payment, the rate is a little higher because of the 2nd loan for the 3% down payment or closing costs exception offered, but maybe only 5% today on a 30 yr fixed. Your rate depends on your fico score as there are hits to the rate for every 20 basis points lower. I specialize in Under 640 fico scores if you need me in CA only...

  • May 29 2011
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I will take my preapproval letter and go talk directly to your local banks.  You will be surprised of what local banks can do.  Promises from internet quotes are not a sure thing. Even prequalifications are just that; and things can change for better or worst when you are approved.

In the mean time,make sure your financial situation do not chnage.  Do not go out and by big ticket items or furniture or anything and increase your debt ratio.  Hold on on any expenses other than the neccesities and even after closing, make sure you have a espending cushon for at least 3 months. 

Also do not close any credit lines. Use then slightly for the every day expenses and pay them in full. Banks are closing credit cards and credit lines that have not been used in a while.

Many people take actions ion the process that bring down the qualification for the loan;  yet you can increase your chances of getting a lower interest rate by decresing your debt and maintaining your credit lines. 

Do not ask for more credit cards or lines ask a denial will decrease your credit score.  Every 20 points of credit score will bring you better interest rates.
  • March 30 2011
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I would check with some direct lenders. That sounds awfully high to me. I do a great deal of business with Met Life Home Loans, and they are always on point. My buddy over there, Eric [Link to website removed by Zillow Moderator] just knocked on out for me in 23 days. You're always safer shopping for the best price. Never put all your eggs in one basket. Just don't have your credit run all over town! 
  • March 30 2011
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John are you absolutely sure your broker has you in at 5.75%?  That's the top of the rate sheet for me.  Is there some type of credit issue?  My 30 year FHA rates start at 4.625% (4.835% APR).

Sites like Lending Tree, Quicken, etc all sell your contact information to Lenders, look into working with a local lender or talk to the few lenders who have responded here and work with the one who is the right fit for you.

If I can help in any way you can contact me through my Zillow profile.
  • March 30 2011
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As a realtor, I have found Quicken to be easy to work with and they seem to want the loan to close.  Where ever you go look at the final closing costs.  These are even more important to study than the interest rate.

  • March 29 2011
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John, are you sure that broker has you at 5.75% Maybe that was just the amount they used to make sure you qualified.

My rate sheet tops out at 5.25% before add-ons for an FHA loan so I can't imagine that's a real rate.  If you like your broker give them a call and ask them to explain - if they waffle and give vague answers then run away.  If they explain clearly and factually then maybe you stick with them.

Re: online lenders...many of them (but not all) are just lead farms that sell your inquiry to four different brokers or lenders.  Kind of hard to maintain quality control in that scenario.

Go Spartans!  I graduated from De Anza.  :)

  • March 29 2011
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Profile picture for Realtyman1
My advise to my clients is to go "local".  Why would someone use a 800/866 mortgage company located across the U.S?  I want someone who is local and has their appraiser local...ie not have a Seattle mortgage company with no representative in Spokane, Wa and they get on the phone from Seattle and "hire" an appraiser.  If I cannot see their eyes, expressions and can't reach across the desk to get their attention why a house is not getting funded on time.....I don't want my client to use them.  Stay local and make sure you compare everything about their "offerings".
  • March 29 2011
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If you choose to shop around, I would just go to different banks, signing up on these sites gives your SS number to all and most run your credit without checking with you.
  • March 29 2011
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I would cedrtainly get a minimum of three quotes.  I'm not sure of your credit situation but a rate at 5.75% seems high given that FHA rates are typically lower than stadard conventional rates. 

Shopping for a loan has become very easy.  If you're a Costco member the offer a rate table from various lenders.  Goolge also uses the Rate Table format.  This a new format for marketing home loans but it is designed to be more customer friendly.   The typical on line loan app will get your phone ringing off the hook with every CO. that bought your application hounding you for sale.

You're probably thinking about your credit being run 3 times and your scores going down.  A mortgage inquiry does not detract from your score at all.  You must not have more than 10 to 12 mortgage credit inquiries in any 30 day period or it may hurt your score.....

 FYI,  FHA is a great alternative if your down payment is less than 20%.  If you're going to put down at least 10% have your Mortgage Banker compare FHA with Conventional financing.  FHA's main draw back is having to carry Mortgage Insurance for minnimum of 5 years.

Good luck on your loan search 
  • March 29 2011
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Profile picture for wetdawgs
Try the Zillow mortgage market place (click on the mortgage tab up at the top of this page).  
  • March 29 2011
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