Author |
Message |
Julieboo
Member
02-05-2002
| Tuesday, March 16, 2004 - 12:48 pm
Is a fixed rate the best way to go? I know rates are down as low as they'll get and are likely to rise and rise... But some of the ARMs seem mighty nice too. Unfortunately I don't quite understand them. Any experts out there who can explain? Or anyone with any opinions?
|
Eliz87
Member
07-30-2001
| Tuesday, March 16, 2004 - 12:56 pm
We're dealing with the same thing. My husband and I are thinking of going with fixed since the interest rates are only going to go up. However, if you plan on not being at your new house for over 5 years, an ARM is the way to go right now (or so I've been told).
|
Kaykay
Member
01-21-2004
| Tuesday, March 16, 2004 - 1:06 pm
The Federal Reserve just annoced they are going to keep rates unchanged. If it were me (and we have refinance 2 times in 5 years to go from 30yr at 6.875% to 30yr at 5.50%) There is a danger that if you do an arm, when it comes time to refinace - the rate could be really high. You can get a 30 yr fixed right now for 5.625%. I have done ALOT of research on this so if you have any specific questions or anything you can post it in my folder 
|
Max
Member
08-12-2000
| Tuesday, March 16, 2004 - 1:13 pm
It depends on how long you plan to stay in the house. If you plan to stay five years or less, then an ARM can be to your advantage. Just make sure it has a cap on how high the rate can increase each year and over the life of the loan. Also, make sure there is no pre-payment penalty and that the loan is assumable. If you plan to stay in the house longer than five years, then a fixed-rate loan is probably the better way to go. Again, watch out for pre-payment penalties and make sure it's assumable.

|
Tabbyking
Member
03-11-2002
| Tuesday, March 16, 2004 - 1:14 pm
we went with a refinance of "5.5 for 7 years, then adjustable". after two years, when we realized we probably would be here longer than that, and rates for fixed for 30 years dropped to that same 5.5, we jumped on it, and only paid a 'modification fee' of about 900 dollars. we did not have to do the whole appraisal crap over again!
|
Way2prissy
Member
07-21-2002
| Tuesday, March 16, 2004 - 3:05 pm
I've been a loan officer and a mortgage broker so here goes my advice: Make sure you read ALL literature and check to see if you have a pre-payment penalty. Most ARM loans will have a penalty if you refi or sell your home within a specified time frame. It's usually six months interest which is basically your mortgage payment X 6. WAY too much money if you ask me. Some lenders will negotiate the terms. I would only go with a 5 year ARM if you think you will move or refinance in the next five years. The adjustable rates can kill you. Also check to see what the rate cap is and if it adjusts once a year or twice a year. Another question to ask the lender is what their yield spread is. This is the difference between the rate the lender is buying your loan for and the rate you are being offered by the loan officer. For example, if you are doing a $100k mortgage at 6% interest and the lender is buying it at 5.5%-- that means that your broker or loan officer is going to get approximately $500 "on the back end" for selling you the higher rate. Loan officers also make money on the "front end" by charging you loan origination points. Anything more than one point is unnecessary if you have good credit. If you have bad credit expect to pay about 3 points in the front. This amount is a percentage of you loan amount that will be calculated as pre paid finance charges or loan origination fees. You also want to avoid what we call "junk fees." These will be called things like: processing fee document preparation fee broker fee application fee credit report fee (anything more than $25 is too much) You can find these fees in your Good Faith Estimate. DO NOT be afraid to question every dime and nickel on your documentation. Loan officers LOVE people who just ignore the paperwork and sign everything. That is how they make their money! You want to make sure that your GFE from the beginning of your loan application process matches your GFE at the loan signing. Any changes should be disclosed to you during the loan approval process. If they are not disclosed to you it is a federal violation of RESPA and you can report it! Finally, if you see a better rate somehwere else, let your loan officer know and see if they will match it! If you apply with too many lenders your credit score will drop from the credit inquiries and that means your interest rate will go up! Hope that was helpful.
|
Julieboo
Member
02-05-2002
| Tuesday, March 16, 2004 - 4:24 pm
Thanks! That last point from Prissy seems like a total rip-off. You get penalized for checking around? Man!
|
Zachsmom
Member
07-13-2000
| Tuesday, March 16, 2004 - 4:41 pm
I am a programmer for a mortgage banker. Credco charges $45 for us to pull credit data so don't be suprised if credit is that much. I guess it all depends on what company you work for,but I know that the above "junk fees" are how our funders and underwriters make their money. If the loan officer/broker is doing the loan himself then yes they could be considered "junk fees", but if not...
|
Konamouse
Member
07-16-2001
| Thursday, March 18, 2004 - 11:31 am
How do you "question" the junk fees (i.e. get them removed)? I did that when we refinanced two years ago and was told what they were for, but that I still had to pay them (they were, of course) added to the loan - I would have rather just paid cash for the refinance and kept the loan at the same amount as current balance on our mortgage, but when you have a VA loan, some things are "set in stone" (so I was told). 'squeek'
|
Way2prissy
Member
07-21-2002
| Friday, March 19, 2004 - 1:06 pm
The best way to approach the junk fees is to ask what the fee is used for. Don't be afraid to ask if it's just a junk fee either. Usually, a loan officer will try to explain it away but if you tell him/her that you're not comfortable paying for a certain fee it's pretty likely it will be waived for you. Loan officers are used to losing deals left and right over fees and rates. Any uncertainty on your part will set off their panic button. Regarding Credit Report fees: $25 is the average fee. We charged that amount but only paid $9 for the actual credit report. If you're charged more than $25 the money is lining SOMEONE's pocket!
|
Not1worry
Member
07-30-2002
| Thursday, June 03, 2004 - 1:49 pm
We haven't bought a home since 1995 and that whole process seems like a blur when I recall it. We sold it three years later and have been living in military housing ever since. Now we are on our way to GA in July and we are 85% sure we'll buy a house. We loved owning our own home and not dealing with landlords and security deposits, but we remember the repair bills and the stress of reselling also. We know we'll probably only be in GA for 3 years or less, so we may have to rent it out when we leave, another scary idea. I'm hoping someone on the board can remind me what a VA loan is all about. Last time it seemed like we just showed up with our VA certificate and they gave us the house. I seriously don't remember giving them hardly any money at all. I know that we didn't have much $$ because we had paid off all our debts. Once again, we've paid off our debts and I have some savings, but nothing like a big downpayment. I'm sure we'll need some money for this whole thing, right? We have 5 days to do this whole thing. DH hated, absolutely despised, the realtor that we bought with and the one we sold with. We've also spoken to some realtors here when we were looking for rentals that treated us like 2nd class citizens because we weren't buying. They were all unprofessional in different ways, but now he doesn't trust any realtor. As a result, he wants to meet them and decide if he can work with them before we start looking at houses. That's fine, but again, only 5 days for this. I had hoped to call around and talk to some people on the phone. His plan is to go into the offices and tell them we are interested in rentals (we do want to check them out, we may find the right rental, who knows). He feels like if they treat us like customers who are important even if they won't get a commission off of us, then they might be decent. If they just toss a list of address at us, tell us the application fee, and then go back to answering the phone, then he doesn't want to deal with them. I read something that said we should get preapproved for a loan before we even begin looking. I guess using places like LendingTree.com. I really feel over my head in all of this and do not want to get taken advantage of.
|
Calamity
Member
10-18-2001
| Friday, June 04, 2004 - 10:18 am
Not1worry: I got the same advice - get pre-approved before starting to look. Looking back, I realize what a lousy realtor I got stuck with; actually even at the time I knew I was getting taken advantage of but I didn't know enough how to fix things. It's very frustrating, isn't it?
|
Grannyg
Member
05-28-2002
| Friday, June 04, 2004 - 11:55 am
Not1, a veteran can borrow 100% of the home's appraised value. So if the house is appraised for $100,000, you can borrow $100,000. That is if the house is selling for the appraised value and not more than that. And you wouldn't want to buy a home that was more than the appraised value because that's all most any body would loan against it. Most of the time, the selling price is the appraised price or less. When we bought our first home, we didn't have to pay one penny. I think now, the benefit is up to something like $250,000. You will need your DD214 papers and most any mortgage company can help you with getting the pre-approval. It takes a while to get all the paper work done so the sooner you start the process the sooner you will know.
|
Not1worry
Member
07-30-2002
| Friday, June 04, 2004 - 6:27 pm
Calamity, did you do the pre-approval? Was that a bad idea, or just a bad realtor? I really hope that we are wiser this time and will be on the lookout for unprofessional stuff. Granny, thank you for spelling that out for me! I knew it was something like that, but couldn't remember. We still might have to pay closing costs and fees, I assume. If we do the preapproval, how do we know that we are getting a decent deal? I can look at what the rates are, is that all there is? Somehow I doubt it's that simple....
|
Pamy
Member
01-02-2002
| Friday, June 04, 2004 - 8:38 pm
There is a VA funding fee that can be expensive but you don't have to pay PMI or have a down payment. Mware knows a lot on this subject, hopefully he will chime in here.
|
Juju2bigdog
Member
10-27-2000
| Friday, June 04, 2004 - 8:54 pm
Not1worry, I am sorry I don't have time to look for you, but there have to be all sorts of websites telling you all about VA loans, and how to get one, and what to expect at closing and things like that. There also ought to be lots of website articles on selecting a realtor. There are some wonderful realtors, and there are some duds. I am not sure your husband's proposed method would be the best way of choosing a realtor, though. Will you know anybody where you are moving? People often love to recommend the realtor they used if they had a good experience. How about a bulletin board for personnel on the military base where you are moving? If you could find a bulletin board of people who had already been throught the experience, you could ask for their recommendations. Finally, I bet there are realtors who specialize JUST in finding homes for military personnel like yourselves. Those are the realtors who are going to know what they are doing. Would the military be able to give you any pointers? Do they have relocation specialists themselves? Just throwing out a bunch of ideas, and maybe one of them will work for you. Try www.google.com and put some of your keywords in there and see what you come up with. Good luck.
|
Schoolmarm
Member
02-18-2001
| Saturday, June 05, 2004 - 5:58 am
I'm working on getting a mortgage right now. I have worked with wonderful realtors, however the one in Clarion is a little slow at getting things done. My method for finding a realtor....ask my department chair who the people in the department use. If they are used to working with professors and musicians, then they won't squirm at my "piano and organ problem". So far it's worked great. I also used a referral from my listing realtor's company and that wasn't quite as good. The personal rec works out best. Relocation is full of stress! I hope it is worth it for all of us. I can't wait to take a dip in my new pool!
|
Mware
Member
09-14-2001
| Saturday, June 05, 2004 - 7:43 am
Not1 - I sent you a PM on Thursday. Did you get it? Marm - Sending you one now.
|
Not1worry
Member
07-30-2002
| Saturday, June 05, 2004 - 1:19 pm
Mware, I don't think I did. I wouldn't know a PM, so I'm assuming that I didn't! If DH or the kids were on the computer, they would just ignore or delete it. My email is in my member profile. Juju, I like your idea of finding a message group for the area. I had done that when we thought we were going to FL, I don't know why I haven't done it for GA. I also remember that our church had a pastor move to that area, I will ask tomorrow if anyone knows his email. Marm, a pool sounds great! We have promised the kids a yard big enough for a trampoline and a garden patch and promised DH room to work work on the boat and build trailers. For me, I just want some space and peace.
|
Pamy
Member
01-02-2002
| Saturday, June 05, 2004 - 1:45 pm
YAH Mware!! Not1, Mware helped me so much when we refi-ed. He is a wealth of knowledge and is sweet too!
|
Mware
Member
09-14-2001
| Saturday, June 05, 2004 - 2:11 pm
Thank you, Pamy. <blush> Not1 - I'm sending you an e-mail now.
|
Craven
Member
05-23-2004
| Saturday, June 05, 2004 - 3:35 pm
Here is the official word on VA loans: http://www.homeloans.va.gov/ We did a VA 3 years ago so if you have questions feel free to email me
|
Not1worry
Member
07-30-2002
| Saturday, June 05, 2004 - 5:30 pm
Craven, thanks for that site. Good info! One big point is that we've had a VA loan once already, so we are 2nd time VA users. They charge a higher fee for 2nd timers. Since we are both veterans, we need to figure out whose certificate we used last time, and use the other one now!
|
Juju2bigdog
Member
10-27-2000
| Saturday, June 05, 2004 - 8:14 pm
Not1, I seem to recall something now about if you get another veteran to assume your VA loan, you get your eligibility back. Did I just make that up? Perhpas it says on the website Craven posted.
|
Mware
Member
09-14-2001
| Sunday, June 06, 2004 - 7:57 am
Dawg, you are correct that if a veteran assumes a VA loan when a house is sold, that the veteran whose eligibility was tied into the property gets their eligibility restored. What Not1 was referring to is the VA Funding Fee, which is a fee the VA charges for insuring the mortgage. Repeat users pay a higher funding fee than first time users. If both spouses are veterans, and only one of them has used their eligibility, the smart thing to do would be to use the other spouse's eligibility this time around.
|
Calamity
Member
10-18-2001
| Wednesday, June 09, 2004 - 10:21 am
Not1worry: Sorry for the confusion - I knew I should've seperated those two statements! I think getting pre-approved was a good idea. But signing up with my realtor turned out to be a very, very bad idea. He was disorganized, kept showing me houses in a different county than where he was supposed to, nearly got us into 2 car accidents, wasn't upfront (okay, outright lied) about some fees, etc. You get the picture. If I had had any brains I'd have just dumped him but he made it sound like you couldn't ditch one realtor for another because the new realtor would "owe" him and that means they'd wring the money out of me...oh, it's a nightmare just thinking about it. You can bet I'm going to be a lot tougher next time around. A lot of people said the realtor figured he could take advantage of me because I was young, single, and a first-time buyer. (Which actually just makes me feel even more naive and stupid. Grr!)
|
Not1worry
Member
07-30-2002
| Wednesday, June 09, 2004 - 7:00 pm
Calamity, that is too bad, but it sounds almost like our first experience! We drove 8 hours from TN to NC to house hunt. I'd spent time on the phone with our realtor, Jane, and she knew we only had a few days. She's prequalified us and made it seem like it was a very important thing and we practically had the mortage already. When we got to NC and called her, she said she'd just returned from a weekend cruise and just couldn't see us as planned and would the next day work out. DH was already leery and wanted to get someone else, but I stubbornly insisted Jane already knew everything and we had to stick with her. The next day, as she's driving around to show us houses, she gets on her cell phone and calls her Visa company. Tells them she went to Mexico or somewhere and bought a bunch of jewelry for several hundred dollars, and now she realizes it's fake. Can they refund her money? DH and I are listening to this, thinking we are supposed to trust her to handle more money than we've ever owed in our lives? I should have realized that anyone could prequalify us and if Jane was stupid enough to buy fake jewelry in Mexico etc., we should have dumped her. There were other things and we did manange to find a house we loved, but it was in spite of Jane. Then when we sold the house, the other realtor was not good at giving us infomation, only 3 people looked at the house while it was on the market, and in my opinion we weren't going to make her enough money for her to really bother with. The worst was when she drove up as we were just leaving forever. The moving van was loaded, the babies were strapped in, etc. She said, Oh, just a little last minute adjustment, the new people want you to pay for XYZ. So sign here and it will just come out of your profits. Turns out the people wanted to split the cost of XYZ and the buying realtor was taking it out of her commission. Our realtor took it from us. I was peeved that she showed up at the last minute when we were stressed and distracted. We felt robbed. Anyhow, I am thinking of using LendingTree.com to see about some preapprovals. Has anyone used them? I wouldn't really have anything to lose but maybe some processing fees, right?
|
Juju2bigdog
Member
10-27-2000
| Wednesday, June 09, 2004 - 9:21 pm
Calamity, sounds like you somehow got stuck with a realtor who did not specialize in the area where you wanted to buy. And that is a pretty important consideration too. If you have some idea of the area where you want to buy, then the best realtor you can have is somebody who knows that area inside and out. It is fairly easy to know who that is when you already live in a town. It is less easy when you are heading into town with no idea of the areas and only have a few days to get a house.
|
Curious1
Member
08-31-2002
| Thursday, June 10, 2004 - 7:53 pm
I have a loan question for all of you out there. We just bought our home about 1 1/2 years ago. We did something a little screwy and I'm not at all sure I remember why. But basically we payed 5% down and come out with two loans. One is the main mortgage loan which is at a fixed rate of 6% (which I still think is the best we could get right now if we were to refinance, right?). The other loan is a Home Equity Line of Credit which is an Adjustable Rate (plus prime) which is currently at 6.5%. I think this whole thing is similiar to the 80/20 type loans out there. Our main loan is 80% of the appraised value at the time of purchase and the line of credit was 15% (because we put down 5%). I believe if I remember correctly that we did it this way to avoid paying the PMI (mortgage insurance). Anyway, my frustration is that after a year and a half we have literally not paid off 1 penny of the Line of Credit loan. I now realize that is because we have always just made the minimium payment. My question's are should we refinance to get both loans combined so that we actually start to pay off some of the principial of the Home Equity Line of Credit? Should we just refinance the Line of Credit into a regular Home Equity Loan? Should we just start paying more than the minimium payment? Are there better rates out there for the Line of Credit if we turn it into a regular Home Equity Loan? The paperwork says on the line of credit that our index is 4.750% and our margin is 2.500%, I have no idea what those numbers mean, does it mean that the cap for the adjustable rate is 7.25%? If anyone has any info or suggestions that could help us out we would appreciate it!
|
Not1worry
Member
07-30-2002
| Saturday, June 19, 2004 - 1:49 pm
Well, we leave tomorrow for our house hunting trip. We hope we can find a nice rental, but we are bringing all our paperwork in case we end up buying. I'm very anxious about it all!
|
Dipo
Member
04-23-2002
| Sunday, June 20, 2004 - 1:46 pm
Curious1 did you get your answers? I can tell you the index is how your interest rate is determined. Most loans use the 1 yr TBill as there index, 4.75% would be the value of the index at the time you closed your loan. Generally, the margin of 2.5 is added to the index value to determine the interest rate when your loan adjusts. I don't think lines of credit have a maximum rate since they are like revolving credit cards. I haven't had to analyse many LOC's for the last two years so they may have changed since then. Your paperwork should explain when your interest rate can change and how they will calculate the new rate. Hope this helps.
|
Not1worry
Member
07-30-2002
| Saturday, June 26, 2004 - 6:30 pm
I hate realtors, I hate finance companies, I hate mortgages, I hate interest rates, I hate house hunting!!!!!!!!!! Okay, now I've got that out of my system. No offense to anyone in those professions, I'm sure you are perfectly wonderful. Needless to say, our house hunting trip was a bit discouraging.
|
Juju2bigdog
Member
10-27-2000
| Saturday, June 26, 2004 - 7:51 pm
Sorry to hear that, Not1.
|
|