How can tell if you are getting a good deal on your mortgage loan?
My husband and I are scheduled to close on our first home on March 28th, so five days away. It is a 1,941 square foot home in Fort Worth, Texas. We were approved for a 15-year FHA loan at a 5.5% fixed interest rate. The builder had the house listed at 3,990 and said they were discounting it to 7,990 because they are trying to meet their quotas and their year end is March 31st. Our realtor and his wife are both in the real estate business. He is a realtor and she is a broker, so they are getting a huge commission off this deal with the builder. The realtor is going to pay off apartment lease (0 per month and we have 3 months left), and pay two mortgage payments for us at ,511 and some change. We both have honestly low credit scores (mine 534 and my husbands 575), but we got 100% financing. They are rolling our closing costs, appraisal fees, etc. into the loan.
Does this sound like a excellent deal? Is there anything that sounds fishy?
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Tags: 511, apartment lease, appraisal fees, closing costs, credit scores, estate business, fha loan, fixed interest, fixed rate private student loan consolidation, home equity loan lowest rate, interest rate, march 31st, mortgage payments, quotas, real estate, realtor, year end
You are getting a very excellent deal on the interest rate with the credit scores you have.
All FHA and VA loans include Taxes and Insurance payment so you need not worry about that.
With them paying off your apartment lease and the reduction in the asking price that is money in the bank for you or money you will or did not have to pay.
The only thing that you are being charged for really is the two months of mortgage that could have been rolled into your loan.
In order to find out you would have to look at and know your HUD-1 closing document that was given to you by the escrow closing agent. If you do not know it call your mortgage broker or go to the closing agent for an explanation.
Nothing sounds fishy, apparently you were treated really excellent.
I hope this has been of some use to you, excellent luck.
"FIGHT ON"
Department of Justice Antitrust issues in Real Estate (testimony)
http://www.usdoj.gov/atr/public/testimony/217299.htm
Real Estate License laws http://www.trec.state.tx.us/formslawscontracts/rules_codes/rela.asp
Texas Department of Housing including 1st time home buying programs: http://www.tdhca.state.tx.us/overview.htm
Legal aid: http://texaslawhelp.org/TX/StateDirectory.cfm/County/%20/City/%20/demoMode/=%201/Language/1/State/TX/TextOnly/N/ZipCode/%20/LoggedIn/0/directory/11/searchletters/bysa
Buena Suerte
Looks like a honestly excellent deal. With scores in mid 500’s in this market if you are getting that rate and terms, I reckon you are lucky. the mortgage industry has been upsicde down in the past 3 weeks Pray that the lenders dont back out
For questions call 813-992-5999
Sounds like your Realtor took excellent care of you. You mention they are getting a huge commission? Well reckon about this, all those things they are paying off for you, they have to pay federal, state and Social Security taxes on. You are getting that money for free! And that doesn’t cover all the other business expense Realtors have that no one thinks about. So when you reckon they make huge money, reckon of the cost of doing business as an independent contractor. Paid employees don’t have a clue as to what the employer pays for them to work there. Be grateful!
Ok, the deal looks incredible. I, myself work at a mortgage company. Most likely all the expenses of 3 months rent and 2 months mortgage payment is being reflected in the loan amount. The rate you are getting with the FICO scores is nearly impossible. Also make sure the mortgage payment includes property taxes, Mortgage Insurance, and Home Owners Insurance.
Your best defense is research. There is no simple way around it. You should have been given several upfront disclosures in conjunction with your loan, one of them is a Excellent Faith Estimate. Check this disclosure, it has all the costs associated with your loan as well as any credits. It’s likely that he is going to use some of his commision to pay these things for you and that is a standard industry practice. Because you have 100% financing and your loan is a buy you will not be able to walk away from the table with any cash, like in a cash-out re-fi for example. So none of your paperwork will reflect these credits. So one of two things will happen depending on the state you live in-a demand will be place in escrow for the cost of the lease and mortgage payments and those items will be paid on the spot or the realtor will cut you a check after closing.
My honest opinion is…
The realtor may be getting a kickback or "bonus" from the seller that you don’t know about. It’s likely, but who knows. I’m a realtor and to be honest w/ you, the commission on a $137K sales is very very small. Not so much that they can pay for all those things out of it.
More importantly, with your credit scores its hard to find rates that low. Be careful w/ hidden fees and things that are being dropped into your closing costs. At the end of the day you can find yourself owing a mortgage of a lot more than the 137,990 you reckon you are paying. In my opinion, you may be paying points to get that lower rate.
Sorry for the bleek outlook. For all I know, the area you are in could have all types of incentives for homebuyers and all could be just fine.
Shoot me an email if you have other questions or want clarification on what I’m saying.
Excellent luck!
If you are getting a home with 100% financing that is generally excellent. If you are truly getting a 5.5% mortgage that is also excellent. The huge question is what is the home worth? I would not be concerned about overpaying by a bit or the brokers commission. Generally if you have no upfront money and mediocre credit you cannot dictate price.
I would make sure that you can pay the monthly payments but. $150,000 over 15 yrs at 5.5% is about $1225 per month, vs. $850 for a 30 yr mortgage. In addition you will also have taxes & utilities.
IF you can make these payments, you are much better off with a 15 yr loan as you will save roughly $80,000 in interest over the life of the loan.
Excellent Luck
Ed