home tips for more helpfull home improvement

Steve D January 22nd, 2010 at 06:23

The rates will vary right up until the time you lock in. The rates online are not considered legally binding offers, just an indication as to what the rates were at the point in time the page was updated.

JudiB January 22nd, 2010 at 07:39

John Paul,
First, I hope you contacted a good, reputable loan office BEFORE putting an offer on a home. And I hope you are getting good professional guidance through the process. The home buying process can be a thorny one if not handled properly. . . and the same is true of the home loan process.

There is no question that there are some great deals out there. . . and some great rates. But you have to think of the online deals as “big tent” offerings . . . while they may well apply to your particular circumstance . . . they also very well may not. Every lender, online or off, has their pool of offerings . . . some broader than others. Each has certain criteria that must be followed in securing that loan. And not every loan is available for every borrower. Are you self employed? Do you have a regular salary? Do you get hourly pay? How long have you been working for your current employer? What other fixed debts do you have? Do you pay child support or allimony? Do you have any positive or negative offsetting factors? What are your credit scores? These things, and many other factors, impact what type of loans you may qualify for . . . and what types may not be available to you at all.

I’ve never been a fan of “shopping rates” for the simple reason that they don’t tell the whole story. I remember a buyer of one of my listings “got a great deal” from a particular lender (which he happened to find online). Problem was when he got to closing NOTHING in the loan package bore any resemblance to the loan he THOUGHT he was getting! He thought it was a fixed rate loan . . . it was not. The rate he’d been quoted was not the rate he actually got. He’d never heard of “negative amortization”, and his loan had it. He never gave any thought to a “prepayment penalty” . . . his loan had that, too! With a lot of work we were able to get the prepayment penalty waived (this is a BIGGIE because the penalty was over $7,000 in the event he sold his home or refinanced within the FIRST 3 YEARS of the loan!) Even though the terms were horrible, he DID close on his purchase . . . and went right out and immediately refinanced his new home!

My point is that WHAT YOU DON’T KNOW can cost you big time. This is not something to “wing it” with. Talk to friends & coworkers & family who’ve dealt with reliable lenders in the past and ask for recommendations. Most certainly if you are working with a real estate agent, ask them for recommendations as well. We deal with lenders all the time and if the agent is experienced, they have an assortment of lenders they know are professional, reliable, ethical people . . . and they also know who to avoid!!!! Talk to a few recommended lenders . . . have them prequalify / preapprove you, making recommendations on programs they think your financial profile best fits. As long as the rates they offer are “in line” with with the market in general, I wouldn’t worry about getting the best “deal”. When you’re looking at just raw numbers, you don’t know what is being “cut” to get to that number. Quite often it’s reliability and/or service.

By the way, my preference is to ALWAYS deal with a lender who will shephard you through the process from application to closing on your purchase. As the process moves along, you want to have a real live person you can call to answer questions, follow up to be sure all the proper steps are being taken, and to hold accountable if/when they’re not.

Good luck! I know this is an exciting time and I hope all goes well for you!