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Profile picture for gregmarkov

How to shop for the best FHA loan?

Venturing over to the Mortgage Advice discussions to ask some of the local bright minds a very simple question that we encounter almost daily, which is:

"How do I shop for the best FHA mortgage?" 

Obviously rates, appraisals, etc are all more or less the same, but how about the rest of it?

I am hopeful that I can compile some of the best thoughts and ideas posted here, and share them with our FHA buyer clients. 

Thanks!
  • May 30 2012 - Phoenix
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Answers (6)

Add these to your list...

Experience working with FHA loans
availability of the loan officer
Lender fees
Customer service, explaining everything to a first time buyer and educating them on what to expect.

  • May 30 2012
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Profile picture for gregmarkov
Thanks, Brian. Talk to me about the lender fees? What specifically should I be looking for in that area?
  • May 31 2012
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Profile picture for KKSka14
Generally, lender fees include some form of processing and underwriting fee. Outside of that, the vast majority of fees are third party fees, such as the appraisal, transfer taxes, title work, etc. or they are cash "costs" that would be required by all lenders, such as hazard insurance and tax escrows as well as prepaid interest. 

Sometimes a lender works fairly closely with a certain title company or title rep (like my branch does) and those fees can definitely be "shopped" around.

At the end of the day, the very "best" lender for you is a referral from a person that you know or trust. How much is competency and trustworthiness and accountability worth to you? Would you opt for the lender whose settlement costs are $200 less if the other lender is a referral from a trusted source? Maybe. Maybe not. 
  • May 31 2012
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Excluding situations where a lenders are clearly out of the ball park with rates/fees, one of the most important things with FHA lending (and this is from direct observation of my less experienced counterparts) is KNOWLEDGE and EXPERIENCE doing government lending (applies to VA also).  I hear LO's making inaccurate statements (at least up through my previous company, my current group of co-workers are all pretty experienced) all the time.  Hearing a co-worker tell a client they can't exclude a debt they absolutely can from their debt ratio or saying they don't need to count debts without asking how long they're deferred for are simple and somewhat common examples.  Everytime I hear this I think, "Another person who doesn't read guidelines before they speak".  I see it in even these forums (I was drilling down to try and help another user and another industry professional pops in and makes a false statement).  In a market of constantly changing investor guidelines, LO's who don't keep on top of guideline changes represent potential embarrassment for you and clients you may refer them.
  • June 05 2012
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Profile picture for Academy Mortgage AZ
Greg -   

For the best pricing get a GFE and look at the Rate and APR.   The lower APR is the best overall rate and fee structure.   The next step is to identify what type of property your are buying.   Some FHA lenders don't lend on Fllipped properties.   Depending on the price range of your purchase price the FHA lender can give you a lender credit to cover some of the fees.   You can also get a Top Lender Report from Core Logic to see what banks are the Top FHA Lenders in you the County you are buying in.    In some cases the seller or listing agents will only want to work with Lenders they have a strong track record with.   

Good Luck!  Erin
  • October 15 2012
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Profile picture for My2cent$
Shop rates and fees and you get what you pay for.... Rates and fees should not vary greatly between lenders. Shop for the best loan officer.
  • October 16 2012
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