Profile picture for rwch606

How to choose from mortgage quotes and next steps

I'm a first time buyer and have some very basic questions.

I noticed a wide variety in the mortgage quotes I received from lenders on Zillow.com and am confused.   The quotes are for a 30 Yr mortgage,  Amount of $130K, Down Payment of $35K.

After I submitted the request, lenders immediately responded back with some attractive offers, and here was the 2 best quotes:

1)
APR 5.192%RATE 5.000%FEES $2,625MONTHLY PAYMENT $698
the lender has a rating of 4.7/5.0 and they are almost 700 miles away from where I live.

Lender 2's quote was similar:

APR 5.164%RATE 5.000%FEES $2,295MONTHLY PAYMENT $698This lender has a rating of 3.3/5.0 and they are almost 1,800 miles from where I live.

Neither of the lenders are banks.  They are companies I have never heard of.  Assuming I do the research and find out they are both reputable, should I go for the company that is closer?  Should I then contact one of the companies to "lock in" the rate?  (What does that entail really, just giving them my personal information and allowing them to do a credit check?)  Or should I quickly do some comparison shopping in my hometown and see if any local bank can match or beat these rates and get preapproved?

One more question - what if I end up finding a cheaper house, and need to borrow less, would I still get the rate that they initially quoted?

Thanks





  • June 27 2009 - Chicago
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Answers (7)

One more thing, if you end up buying a cheaper property, the Lender will adjust your loan amount to it should be, based on the new purchase price.
So if you were buying a $200k property and putting down 3.5% i.e $7k, your base loan amount would be $193k.  If  you then find a new property at $100k, your down payment will be $3500.00 and your loan amount would be $196,500.00.
Hope this helps too.
Good luck, once again.
  • June 29 2009
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Profile picture for natewolf
Seems to me you should qualify for an FHA mortgage.
The distance of the bank is not a problem-- even local banks often use out of state processors. Your documents can be emailed or FedEx'd to you and the closing attorney.... the main issue is their fees, your down payment, and your rate (monthly payment).
If you don't actually borrow the amount (find a cheaper house), they will need to adjust the quote based on the amount you actually borrow.
  • June 29 2009
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Hello rwch606,Please understand that it would not matter what rate any Broker/Lender quotes you.  Those rates could change depending on a variety of factors - Income, assets, credit score, downpayment etc.

Also, markets rates fluctuate constantly so until your rate is "locked in" which means it is now guaranteed for a period of time, any quotes are at best, generic estimates.

You would do much better to call a Broker/Lender and get prequalified or better yet, preapproved.  This way, the Broker/Lender has looked at YOUR specific situation, and is giving information based on your information, which then is no longer generic.

Your rate should not be the only thing you take into consideration though.  Please be very careful to choose a Broker/Lender that:

1.  Can offer you a variety of loan programs in their portfolio.

2.  Has the knowledge and experience to intelligently discuss each of those programs, and allow YOU to reach a decision without trying to force one on you.

3.  Will treat you with respect and make sure to be accessible to you throughout the process.

Remember, a Company is only as good as it's employees.  You might go to the best known bank or Broker/Lender on your opinion, but if you get a bad Loan Officer (and there are unfortunately several out there), your experience would be terrible through out the process.

Good luck in your mortgage process.

  • June 29 2009
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Ignore the quotes you got from Rocco,  (4.7/5) and Aimloan (3.3/5)
Look to your right --->>>
Call John Paunan, he quoted your request and is the best qualified to assist you.
  • June 28 2009
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Are you serious TIm...

Suntrust Correspondent price on Friday was at 100.051 on a 15 day lock...How could anyone make any money on that with only 2600 in closing fees?
  • June 28 2009
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Profile picture for SunTrust
Personally I'm biased towards using a bank.

Assuming high credit scores (720+), you're putting down 26% and it's going to be your primary residence I'd have to say both quotes are high (by at least $600). (based on pricing Friday 26 June)

There are very few lenders that will lock you in prior to you having a property identified (i.e. under contract).
  • June 28 2009
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both are BS...5% rate with your loan amount and the current market would be very expensive in points.  


Post your Z number and Plenty of folks will take a look and tell you what they think are the best quotes.
  • June 27 2009
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