What's the best way to shop for a purchase mortgage?
What's the best way to shop for a purchase mortgage?
I'm gearing up to buy a first home and know that I want a 30-year fixed rate mortgage, most likely 0 points. What is the best way for me to shop around and get the best terms possible on the mortgage?
For what it's worth, I'll be buying a home in the Bay Area.
For what it's worth, I'll be buying a home in the Bay Area.
I would first check with my own bank, and a credit union if you use one. Check PenFeds rates by going to their website. Anyone can join their credit union and their rates can be used as a barometer. Also look on Bankrate.com. Only then would I contact a mortgage broker. Good luck.
Home ownership can be very satisfying. Just remember IMO you buy a home to provide shelter for you and your family. I have never viewed it as an investment. If your home appreciates in value that is a great thing but not the reason you buy in the first place.
Home ownership can be very satisfying. Just remember IMO you buy a home to provide shelter for you and your family. I have never viewed it as an investment. If your home appreciates in value that is a great thing but not the reason you buy in the first place.
There must be blogs out there that track mortgage rates (sort of the flip-side to Bankdeals for CDs). Bankrate covers mortgage rates, but I'm not sure how comprehensive it is (I've heard there is a "pay-to-play" aspect).
Here in the Bay Area, it might be worthwhile to consider whether you will be over or under the "true" conforming amount of $417K, since that will make a difference.
Bozo
Here in the Bay Area, it might be worthwhile to consider whether you will be over or under the "true" conforming amount of $417K, since that will make a difference.
Bozo
- Taylor Larimore
- Posts: 32842
- Joined: Tue Feb 27, 2007 7:09 pm
- Location: Miami FL
Re: What's the best way to shop for a purchase mortgage?
Cannedhamcannedham wrote:I'm gearing up to buy a first home and know that I want a 30-year fixed rate mortgage, most likely 0 points. What is the best way for me to shop around and get the best terms possible on the mortgage?
For what it's worth, I'll be buying a home in the Bay Area.
Try this:
Mortgage Marvel
"Simplicity is the master key to financial success." -- Jack Bogle
My small additional suggestion is that if you look for a mortgage broker, look for "upfront mortgage broker". It basically means that they are willing to show you how much of a commission the lender is paying them, which helps align their interests with yours. It doesn't guarantee they are good but seems like a good idea to me.
Check your bank, online, and a couple of mortgage brokers. Make sure all people have been funding mortgages for at least 3 years and maybe longer. I don't think you want to deal with the folks who got in a couple years ago when the money was easy.
Consult http://www.mtgprofessor.com/ for tons of helpful advice.
I'd make sure all loans were quoted with 0 points and compare closing costs to be the same. Otherwise, you will be fooled by a lower rate that is bogus.
Consult http://www.mtgprofessor.com/ for tons of helpful advice.
I'd make sure all loans were quoted with 0 points and compare closing costs to be the same. Otherwise, you will be fooled by a lower rate that is bogus.
- AnimalCrackers
- Posts: 436
- Joined: Mon Mar 19, 2007 1:37 pm
- Location: Northern Front Range, Colorado
Our daughter just bought her first home in Alameda. She got pre-approved for a loan before she made an offer. It really helped when she was negotiating.cannedham wrote:Which comes first -- the home shopping, or the mortage shopping? Or do you do both simultaneously?
This feels very overwhelming.
I think you can go home "shopping" (indeed, you'll have to have an idea of how much you'll need), but it might help to get that pre-approval before you make an offer.
Bozo
- DiscoBunny1979
- Posts: 2054
- Joined: Sun Oct 21, 2007 10:59 am
in my opinion, getting pre-approved is great when the market is moving quickly and you need to be first in line at the table when presenting the offer. But, I don't think getting pre-approved is as big a deal when the market is slow and the house you're interested in has no foot traffic or is a foreclosure. You just need to have narrowed your choices of who you want to help you secure your loan.
The house I'm currently in was obtained through a mortgage broker. However, I told the broker what I wanted . . . a 15 year fixed mortgage, 20+% down, no PMI, and less than 6% (6 years ago was the purchase).
The broker researched options for me based upon my credit profile and income and desired loan type. Having met with the broker was important because the first house I was going go buy fell out of escrow because of mold and a bad roof . . . and then I had 30 days with a real pre-approved loan and locked-in rate to secure the house I'm in now. So, getting the paperwork started is important because sometimes the house you want isn't the house you end up with!
The house I'm currently in was obtained through a mortgage broker. However, I told the broker what I wanted . . . a 15 year fixed mortgage, 20+% down, no PMI, and less than 6% (6 years ago was the purchase).
The broker researched options for me based upon my credit profile and income and desired loan type. Having met with the broker was important because the first house I was going go buy fell out of escrow because of mold and a bad roof . . . and then I had 30 days with a real pre-approved loan and locked-in rate to secure the house I'm in now. So, getting the paperwork started is important because sometimes the house you want isn't the house you end up with!
- pointyhairedboss
- Posts: 504
- Joined: Fri Mar 02, 2007 9:47 pm
I am in a similar boat as cannedham - where to go to find the best mortgage. It is more difficult than most financial choices because
a) Mortgages rate change every day, so its very difficult to compare competing quotes given out on different days. And most of the time, you can't get a quote from their website...
b) There are very few, if any, non pay-to-play web sites that list mortgage quotes
c) Even if you found a good mortgage query site, some internet mortgage lenders have a horrible reputation, Lending Tree in particular.
I have sought quotes from:
- banks I am already of customer of
- zillow.com - Zillow.com has a decent anonymous way of soliciting rate quotes from lenders. Again, you have to be careful with (c) from above.
- realtor recommendations. You have to be very careful here too as realtors and lenders can have affiliated business arrangements. Most of that is illegal now but there are legal work arounds and some agents are under tremendous pressure to push through house approved vendors. Ethics was a big factor in my choice of realtor.
a) Mortgages rate change every day, so its very difficult to compare competing quotes given out on different days. And most of the time, you can't get a quote from their website...
b) There are very few, if any, non pay-to-play web sites that list mortgage quotes
c) Even if you found a good mortgage query site, some internet mortgage lenders have a horrible reputation, Lending Tree in particular.
I have sought quotes from:
- banks I am already of customer of
- zillow.com - Zillow.com has a decent anonymous way of soliciting rate quotes from lenders. Again, you have to be careful with (c) from above.
- realtor recommendations. You have to be very careful here too as realtors and lenders can have affiliated business arrangements. Most of that is illegal now but there are legal work arounds and some agents are under tremendous pressure to push through house approved vendors. Ethics was a big factor in my choice of realtor.
Has anybody on this forum dealt with an "upfront mortgage broker"? The website www.mtgprofessor.com talks highly about them and the concept seems to make a lot of sense.
We are relocating to the Denver area and I saw of couple of UMBs listed in their website.
We are relocating to the Denver area and I saw of couple of UMBs listed in their website.
- Ilovevolleyball
- Posts: 352
- Joined: Fri Jan 11, 2008 1:56 am
A certain section of the Mortgage Professor's site you should visit is: http://www.mtgprofessor.com/mistakes_to_avoid.htm. He has just about every mistake you could possibly make. I will also be a first timer in 2009 if I stick to my savings plan. I particularly like the mistake people make confusing the down payment with the down payment plus settlement costs: http://www.mtgprofessor.com/A%20-%20Dow ... ayment.htm
There are some strange ones:
http://www.mtgprofessor.com/A%20-%20Pur ... _house.htm
Anyways, this is yet another endorsement for the MTG Professor. Great site, but he could be a little less stiff with his writing.
There are some strange ones:
http://www.mtgprofessor.com/A%20-%20Pur ... _house.htm
Anyways, this is yet another endorsement for the MTG Professor. Great site, but he could be a little less stiff with his writing.
- Ted Valentine
- Posts: 1561
- Joined: Tue Jul 10, 2007 10:28 am
- Location: Music City USA
No brainer. Do the Mortgage first.cannedham wrote:Which comes first -- the home shopping, or the mortage shopping? Or do you do both simultaneously?
This feels very overwhelming. :P
You need to know your budget and what you can afford -- including taxes and insurance. Otherwise you're at the mercy of your realtor who will sell you the biggest house they can squeeze you into. Most realtors tell me the biggest part of their job is finding a way to get people financing for their home. Obviously the more they sell the more they make.
Also know that lenders will approve you for way more than you should spend also. No more than 25% of your monthly income should go to your PITI payment.
Get the finances straight first. Know what your budget is. Don't be tempted to stray from that when the lenders and agents try.
Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.