Profile picture for STINAIKAR

My Experience with an Upfront Mortgage Lender - Aimloan.com

For the benefit of those curious about upfront mortgage lenders, I thought I would start this thread. Today (Oct. 8th) I locked in a 5/1 ARM at a rate/closing cost combination which I thought was pretty good after comparing it with almost 5-6 lenders. Let's hope there are no nasty surprises at the end. I'll keep you posted on my experience as I move towards closing. here's the deal I got and locked today.

Loan type: Refinance with no Cash -out
Loan Amount : 252,000
Estimated LTV based on Zillow: 80%
Credit Score: 748
Property located in Florida (Alachua County)
5/1 ARM rate: 4.125%


Total aimloan fees: 1,995 (guaranteed)
Total 3rd party fees (includes appraisal, closing agent fee and title insurance):
1,312 (guaranteed)
Government Fees (includes recording fee, documentary stamps and intangible tax): 1,451 (doesn't say guaranteed)
Guaranteed Lender rebate : 4,571
Net Closing Costs (excluding prepaid interest and escrow advances) : $187

I took the option to escrow (even though my ltv was below 80% because the lender rebate was higher. Without escrow, everything else was the same but my net Closing Costs were $817 because of a lower lender rebate.

To lock the rate, I paid $300 through a credit card towards the appraisal fee.
  • October 08 2009 - Alachua
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (94)

Profile picture for Ray Stevens
Two posts for the same topic?

By the way, bond market tanked today and that makes that one day old Aim offer even worse.
  • October 09 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for STINAIKAR
The bond PRICES tanked. Which means bond yields went up. 10-year bond rates went up from 3.25% to 3.38%. Which means mortgage rates went up, not down. Which makes the one day old Aim offer much much better?
  • October 10 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

WOW...The "professional" being schooled by the consumer...Do all your consumers explain how the bond market works to you?

Stinaker,

Upfront or not you could of gotten that or slightly better from any number of lenders.  I don't price loans in FLA but I have been locking 5/1 ARMS at 3.875% with No points and no closing.  Each state is a little different so I may be able to get a little better based on the state.

Regardless that is a good deal-just not exclusive to upfront lenders.  That designation is a joke you simply pay a fee and they will list you as an upfront broker or lender.  Let us know how it closes....It looks like you have a good loan officer.

  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for SunTrust

Appraisal fees are considered as lender fees, not 3rd party fees; it's odd they wouldn't include that as part of their "guaranteed" $1995.

start rates (the initial fixed period) on hybrid ARMs (i.e.5/1) aren't driven by MBS market anyhow; generally they follow 2 or 3 years swaps (plus a margin).

The lender rebate is in line at that rate (give or  take an 1/8th %, i.e depending on the time we had the same at 3.875% to 3.99%); especially given the guaranteed fees they're charging you before giving it back to you, but 4.125% is pretty good overall..



  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for tchau_99
STINAIKAR,

Thanks for sharing!

For a $200 cost, this is a good deal

Be sure to check the paper before you start signing the deal.

Your loan value is $252,000 and you should expect to see this number in all regards.

If you see $4500 + $252,000, just scap the deal and lose only the locking fee of $300.

Keep posting your development.

  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for STINAIKAR
Andrew, if you were offering 3.875% with no points and no closing costs on Thu, that was great. But didn't see your quote. I couldn't get the same deal from aimloan just 24 hours later. On Fri, the closing cost estimate for a 4.125% 5/1 ARM had jumped to 1,666 from 187!!

  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I don't quote regularly and would never quote in FLA so you wouldn't.  My average loan size is above 350 so I can usually cover all costs with .75% in ysp.

I think I said it was a good deal but didn't seem particularly special.  Nothing wrong with getting a good deal.....the magic lender and magic pricing doesn't exist.

  • October 10 2009
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for STINAIKAR
If there are no magic loans and magic lenders, then there is no incremental benefit to me in choosing one lender over another. Which means that the competitive edge from a lender's perspective must come from packaging, transparency (or at least the perception of it) and loan servicing. I find the online lenders are much more competitive on these aspects than say a lender sitting in a bank office.  these are important considerations at least for consumers like me.
  • October 10 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

The loan scenario is not bad, but also not great...respectible.  Once you know the appraised value and if you have any wiggle room under 80% (to avoid MI) I suggest you look in to the following: You are locked at that days historical pricing.  If you shift some of the "back end" fees to the front and include it in the loan, you should be able to get a much lower interest rate.  Every scenario is different and it may or may not make sense but have them do the analysis based on the historic pricing and give you a break even ROI analysis.  3.625 to 3.875 might be in the cardss if you have to room to stay under 80%.  The impact to your payment on the interest rate versus adding some cost could be worth it

I also hope that before they charged you the $300 that it was AT LEAST 3 full business days after receiving a complete and legal loan disclosure package from the direct lender.  There are new requirements that prohibit that charging of any fees (except reasonable credit report) prior to certain legal disclosre and waiting period requirements.

It was common practice for many to charge an "application fee", or other versions but that is all illegal now.  Many will give you a quote but then charge to actually provide you with a Good Faith Estimate...also now illegal.

I trust as "Up Fromt" mortgage brokers they are compliant
  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

5/1 ARM at 4.125% is a fool's gamble. Heck my local credit union has 4.625% 30 year fixed for 2 points... You are saving a mere 5% over 5 years versus the risk (and not a small one) that rates climb dramatically in the next few years. Think 8% and above, reference Iceland to see how fast they can climb when a country lives on borrowing money. A jump in rates will kill sales, and throw priced down, so if your plan is to sell in less than five years, what would your plan B be? at least with a low fixed rate you could just keep it forever.
  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for SunTrust
Heck my local credit union has 4.625% 30 year fixed for 2 points.

4.125% with a lender credit really doesn't compare to 4.625% with 2 point. The equivelent lender credit on a fixed rate is in the 5s.

the magic lender and magic pricing doesn't exist.
There may be no magic pricing, but contrary to some opinions; some lenders/banks do have lower rates than others. However in most instances the spread from highest to lowest ( not counting the price gougers) is usually .25% to .375% at most.

I also hope that before they charged you the $300 that it was AT LEAST 3 full business days after receiving a complete and legal loan disclosure package from the direct lender.

Actually the MDIA requirement is only that you receive and acknowledge the TIL before fees can be collected; something that can be done in less than 5  minutes, usually I can do this while still on the phone with the client..
  • October 10 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for STINAIKAR
How can you compare a 5-year horizon with a 30-year horizon? I don't intend to live in this property for 5 years. So its pointless to compare how rates would rise after 5 years. There is no Plan B. And even if higher rates kill sales, the losses would be offset by the lower price on the new property that I would buy. Either way, no one can predict and account for scenarios that far ahead
  • October 10 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Stinaker,

It is not pointless.  You may intend to sell in 5 years but rates will be up and could be above 8%...Take a guess what that does for potential buyers as well as prices...

5 years from know that rate could jump anywhere from 5-9% and although you may want to sell you may not be able to sell.  4.125% is a great rate...4.875% on a 30 year fixed 0 points 0 closing is pretty great rate as well...with the added benefit of not having to worry about a rate increasing!

The difference is $110 per month... Nothing to sneeze at today but 5 years from know if you can't sell it and rates are higher...Very likely...it may not be the no brainer you feel it is today!

  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for STINAIKAR
But even if the rates rise and prices fall, the effect should be more or less uniform across the real estate market. If I take a $50,000 loss selling my old house, that should be compensated by a $50,000 discounted price when I buy a new property? No?
  • October 11 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for SunTrust
Alachua County in Fla doesn't rely on the vageries of vacation home markets. The market there is stable as far as Fla markets go. It has the Univ of Fla  (Go Gators!) and up the road a bit (next county up, but still...) has the very large Fla states prison, both large stable employers. Unless on campus housing has increased in the last 20 years; there's a pretty steady market for investment properties there also.

In other words, I wouldn't be too concerned about getting a 5/1 ARM.
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Hi Stinaikar.
If I were you, I won't debate with the fortune tellers or the psychics.
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

How much principle do you think will be paid off in 5 years?  I would venture to say not 50K.  You could end up being upside down with a mortgage that is going to adjust up!

I am not saying it will happen simply saying that it can happen and that scenario is not all that much of a stretch. 

Tim,

What if rates are in the 8's in 5 years?  Not saying it's the wrong decision just one that is not a no brainer!

  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

* If Stinaikar's mortgage interest rate is 4.125%, to the 60th month,  Stinaikar paid for the interest $49,664, paid for the principal $23,615. The mortgage balance is $228,385.
* If Stinaikar's mortgage interest rate is 4.875% fixed for 30 years, to the 60th month,  Stinaikar paid for the interest $59,011 (save almost $10k. in the interest compares with 5/1 ARM), paid for the principal $21,005. The mortgage balance is $230,995.
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for STINAIKAR
But rates don't rise without a reason. They typically rise due to inflationary pressures in an economy which in turn is accompanied by higher incomes, higher demand and generally higher prices. If rates are high, then there is reason for it. Consumers are in generally a better shape and tend to drive prices up.

Look at 3 years back. Both rates and real estate prices were high. Compare to now - both rates and prices are low.

You are ignoring the fact that if rates are high, then people's capacity to absorb these high rates is also high. So if they wanna buy, they will.
  • October 11 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

(save almost $10k. in the interest compares with 5/1 ARM) -> (save almost $10k. in the interest with 5/1 ARM compares with 30 years fixed)
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Follow historical, the interest rate is always going down, sometime it is going up 1 point, the trend from 20 years back to now is going down however.
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

White picture, the CMT index was 4.5% higher 26 months ago than today, what are you talking about?
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I expected the interest rate will hover around 6% range on next year if the government is not doing another intervention. However I don't think it goes for 8% in next few years, and OP also can refinance to the fixed rate if the things went bad.
Even with 1999-2006 was the high of housing bubble and strong economy (without of the government's intervention) the interest rate from 7% go down to 6%.
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Your quote from an hour ago:

Hi Stinaikar.
If I were you, I won't debate with the fortune tellers or the psychics
.

Looks like you are also a psychic with your prediction above.   

The point the lenders are making is that he may be stuck with that 5/1 and his property in 5 years, unable to sell even if he plans on buying something else. 
  • October 11 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

White---We have been printing money like it is going out of style....and it just might be!  Inflation is on the way I would almost guarantee 30 year fixed rate mortgages @ 6.5% by the end of the 2nd quarter.  The govt has already extended the MBS buying till the end of the 1st quarter but that cannot last forever.  Neither will these low rates!

Nobody is disputing what he will save in the next five years and to be honest as a loan officer...It makes no difference to us what he chooses.  In most cases a 5/1 ARM is a loan officer's friend...(they tend to refi good for folks that make comissions). What should be a factor in the decision is what is going to happen at the end of 5 years.  If you think that any historical chart that you look at will be of any use projecting what is going to happen you are off your rocker.  The Govt has never dabbled in the credit markets to the extent they have over the last 12 months so there is no historical data that mirrors the current market conditions.

  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Your definition of a high rate is misguided!  1st mortgage I ever wrote was 14%...and that was a great rate at the time!  Rates have been on the low side for close to a decade!
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I'm agree with you guys the lenders, there is not worth to take the risk of 4.125% ARM compares with 4.875% 30 years fixed (I choose 30 years fixed).
However it is groundless to predict the interest rate will go up to 8% and the home prices will go down in next 5 years.
US government is not the 3rd country governments, the amount of the money that US government can print was depended on the permit from US financial committee and also depend on world finance's situations (At least that is what I read from the books long times ago, I don't remembered the book's name).
I don't want to debate, how the world finance's situations affected to the printing money of US government, since it is wide debate and it is out of scope of the topic and the times.
  • October 11 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

the amount of the money that US government can print was depended on the permit from US financial committee and also depend on world finance's situations -> the amount of the money that US government can print was depended on the permit from US financial committee and also depend on world finance's situations and the reserve of golds in US treasury
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

White, you clearly have no idea what you are talking about!  We have been auctioning off debt in record numbers to fund this little stimulous package...Find me one economist that will argue that it won't result in inflation?  they will argue about when but I am pretty sure every one will say it's comming.
  • October 11 2009
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Mild inflation -> YES, as usual of the normal economy.
Massive inflation -> NO, the near future economy's situation is not support for the massive inflation (as same as the house prices is not shot up to sky if the people keep losing their jobs in the bad economy).
Debt had to repaid in amount of times  -> YES
Print the money to repay the debt -> NO
  • October 11 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

  1. 1
  2. 2
  3. 3
  4. 4