My husband and I are currently searching for a mortgage. We utilized lendingtree.com who gave us some incredible deals. We were wondering if Lending Tree brokers have a good reputation. The two brokers that responded are the Prime Financial Group and the Platinum Capital Group. Do these companies have good reputations?
The other question we had was whether or not $300 is a normal application fee? It is paid up front.
If this is in the wrong forum, I apologize in advance, I pondered where to put it.
So far we’ve been happy with what’s been offered to us. In fact, the offer we’re considering is so good it’s almost scary-- too good to be true. That’s why I decided to ask.
Has anyone ever had any experience with asking them to waive the application fee? Will they do it? Considering the amount of interest they stand to make over the lifetime of the loan (or, more likely, profit once they sell it) will they really pooch the deal by refusing to waive it?
On our last refinance my wife arranged everything with one lender. When he sent us the application I noticed all kinds of fees and charges which were rolled back into the loan. So the rate was good, but the net effect of all the fees was like paying a grand or two extra on the loan. Not what we were looking for, especially as we were likely to sell the house soon afterwards. We found another loan at a slightly higher rate without all of the added charges that were better for us.
Morale of the story: read the fine print and be sure you are aware of all charges that will be added in or required of you. They have to do this anyway at closing but it’s better if you find them up front.
I have not heard any complaints about the lenders on that site, just that the rates were not the best available.
Where I live, the site monster moving dot com lists a good number of brokers. One option is to search under no closing cost loans. This is a loan where you pay a slightly higher rate, but there are no out of pocket costs and no costs added to your principal. Its a good idea for a refi that you don’t expect to stay in long. I have been happy with the number of brokers listed on this site and their rates, although the one time I did try to refi the broker had tight underwriting criteria and a minor lawsuit against my condo association prevented the lender from closing, causing me to miss out on my ability to refi. But I didnt come out of pocket, although the broker fronted the appraisal fee and lost some money.
I’m skeptical that Lending Tree would ever provide the best rate, just because the lenders pay a fee to be listed there and they only show you at best 4 offers. I would think in most cases you could do better shopping around a bit more.
BTW, a federal law called RESPA prevents the lenders from paying firms like Lending Tree a kickback, so basically LT gets a flat fee of at most a few hundred bucks. Monster moving is the same thing, although I suspect their fee is signifcantly less.
Another good site is bankrate dot com, although they don’t have a no closing cost option.
We’re not paying the closing costs-- the seller has agreed to do that, so it’s not a concern.
They really are. I was skeptical, too, until I called around to our local banks. For the specific loan that we want, the Prime Financial Group has the best rates we have seen. Hubby drilled them with questions about fees, and the woman he spoke to claimed that all of the fees have been disclosed on the Good Faith Estimate she sent to us. They’re considerable-- about $900, but compared to what we’ll be saving over the life of the loan, we’re thinking it’s a pretty good deal. Hubby has played with all of the numbers, and if they’re disclosing everything, we stand to save money.
However, a part of me wants a lender here in town, where I can walk into the office/bank if there’s a problem and discuss it face-to-face with my agent. (Or whatever you call them.) I’m a bit afraid of customer service problems, but, as a friend reminded me, my bank could sell the mortgage at any time, and I’d have the same potential for problems.
What scares me the most is the idea of going in to close on the deal and being “slammed” with fees that we didn’t know were going to be added in. As I said, Hubby questioned them from all angles, trying to find out if there was anything else we’d be charged, but I’ve heard horror stories.
Does anyone have any experience with this sort of thing?
Lending Tree does not search all available lenders. Lenders list themselves voluntarily. OTOH, they do this to get lending business. If their rates are not competitive, they don’t get the loans. So you should find good deals there, but not necessarily the best ones.
Your friend is right. Look for the best deal. Mortgages are bought and sold all the time, and there is little you can do to prevent it. A few lenders say that they won’t sell your loan. So if this is a deal breaker, look for one of these, and get it in writing.
Somebody already mentioned RESPA. Another provision of RESPA is that you get to look at all of the closing costs (on a document called the HUD-1) one day before the closing. You have the right to rescind the deal (under Regulation Z, promulgated under the Truth in Lending Act) within three business days, if you change your mind. So that is how you deal with undisclosed costs.
Another name for the HUD-1 is a good faith estimate. Get that from any potential lender first.
That’s clever to get the seller to pay your costs. However, I would check with your real estate agent to make sure they are required to pay your loan closing costs, which are not the same costs as the closing costs for selling the property.
Agree that your loan is likely to be sold, so don’t bother patronizing a local bank just to stay local. Go for the best rate.
I would recommend checking a few more sources. My newspaper on Sunday has a list of about 50 brokers with rates for my area. You are very likely to save enough money to make this well worth your effort.
I agree with the last paragraph. It never hurts to shop around.
A minor quibble with the first statement. The HUD-1 is the settlement statement. It is different from the GFE (Good Faith Estimate). The GFE is only an estimate, it is good for comparison shopping, and you have already seen it, but it will not show all of your real costs. That is the job of the HUD-1. You get the HUD-1 one business day before closing. You can ask to see it before that if you like, but they must give it to you one day before closing.
While any lender can promise you the lowest rate in the world, you don’t have anything until you’ve locked that rate in. It’s not unusual for these lowballing lenders to say, as soon as you’ve completed the application process and are eligible to lock a rate, “Rates shot up today, so we can’t give you the rate we were talking about before. And you’d better lock in this higher rate now because the rates might go up even more.” By that point you’ve already committed to paying at least the application fee and probably the appraisal fee, so they know you are unlikely to walk away.
While brokers and lenders like to say that they have the lowest rates, rates are actually pretty close across all lenders. You should pick a lender or broker by reputation and word of mouth. If you pick the person offering the lowest rate, you probably are just picking the best liar.
While this is true, it only applies to refinance transactions. Since the OP mentioned “the seller is paying the closing costs”, I am assuming that this is a purchase transaction? And even with a purchase, you DO still have the right to see your HUD-1 at least 24 hours in advance of closing.
Something else that bears mentioning: in addition to the Good Faith Estimate mentioned earlier, you are supposed to receive an preliminary Truth in Lending Statement (TIL) within 72 hours of a loan application being accepted. Be sure and look at the number near the top and at the far left side (the APR, or annual percentage rate).
Without going into a week long dissertation on one of the most misunderstood (by the general public) documents involved with your loan, I will let you know that the whole idea is to inform you that it costs you money to borrow money. The APR is supposed to give you an idea just how much . In other words, it reflects the cost of your credit over the life of the loan (if you have an adjustable rate, this will not be as accurate, as a large portion of it will be estimated). The TIL is supposed to be a “shopping tool” for borrowers… a way to compare the overall cost of one loan to another, even though they might have different interest rates.
Also…look at the box at the far top right of the TIL. It shows the total amount you will pay back at the end of your loan if you allow it to go the whole term and never make any principal payments.
There’s lots more (Zzzzzzzzzz), but that should give you some things to think about. Hope it helps!
Hidey ho. Just so’s everyone knows. With lendingtree, if I list there, I am only required to show the fees that I charge as a mortgage company. This is rather key because you will see my fees as being $818. I’m not even required to tell you about the $300 appraisal you’ll need. You get all excited and think wow, that’s cheap. Then you get the GFE and you see almost 2000 in closing costs. Please be aware. The lender fees in the 800 section of the Good Faith Estimate are the Lender Closing Costs. (it is so named because all of the items are numbered 800-8xx) After that you will have all of the other fees associated with a purchase or a refinance. (like title work, etc) So if the company told you that their fees are only a $300 app fee, they’re probably telling you the truth. They’re also telling the truth if they say “we’re paying all of our closing costs for you.” You will just be expected to pay everything else that’s not that $300.
One more thing. Never, ever, ever be afraid to get up and walk out of a transaction. I know of numerous cases where the lender promised the world, and when the person got to closing, they upped the rate, points, and who knows what else… THIS IS ILLEGAL if they never disclosed the changes to you 24-72 hours before settlement AND got you to sign off on it. I am not kidding. If this happens, get up and walk out. If you didn’t sign anything, there is no legal action that can be taken against you. If this is a purchase transaction, and not a refinance, then this is especially important. The day you sign is the day that the mortgage funds, so there is no right of recsission.
Lissa, if you want more personalised advice, email me and I can tell you if the rate they’re offering is on par with the market, as well as break down the fees for you. Rates have shot up since you posted, so I hope you did lock in.
If I had locked in, the rates would have plummeted the next day, I’m sure.
We decided to go with our local bank. We discussed the rates the broker was offering us, and our local banker was able to compete pretty well. We have to put more down than we intended, but the interest rate is pretty good. (5 7/8%, I think. I don’t remember-- Hubby told me, but it’s getting late, and I’m tired.) Our banker also promised us that our mortgage would not be sold-- that her bank didn’t do such things.
The only problem is that we don’t close 'til the end of next month, and our lock-in is only good for thirty days. She’s promised that it won’t vary more than a quarter of a percentage point, and that they would “take care of it”, whatever that means.
Llama’s comment about walking away from a loan if they jack up the costs/rate at closing is a good one. . .in theory. Your legal obligation to the lender is different from your legal obligation to the seller, so if you can’t get a new loan within the deadline of the sales contract, you could have problems in that regard.
Lots of good advice above. I agree with the advice about not closing when its necessary. But you need to understand your obligations to the seller under your real estate purchase contract.
A good real estate agent will have the terms of your loan built into a financing contingency in your agreement with the seller - i.e. buyey’s obligation to close the purchase of the home is contingent on obtaining financing of x dollars at y rate or better.
Also, I’m not a real estate agent so I would clarify what closing costs mean - as a seller, I would assume I pay only the cost of the atty and the broker, not your financing costs. When I have sold a house, I always put in the contract that I pay closing costs, up to $x so I have never had to worry about this too much. Point is, I wouldn’t assume seller is paying your costs - you’d better check.
I stand corrected on HUD-1. I did mean a good faith estimate. When you are shopping for rates, you are not going to get a Hud-1 unitl they have all the information, such as taxes, any liens, mortgage payoff to the penny, etc. What they will give you is a GFE, and while subject to change this is what you want to comapre rates once you have identified a small number of lenders who are in the ball park.
Done and done. We got burned on a bad real estate deal a few years back, so we’ve written many clauses into the contract. I’m sure the seller must have been bewildered by our apparent paranoia, but we’ve covered everything we can think of.
That was written in: we asked for $3500 to be paid by seller towards closing costs. That more than covers it.
