By Admin on Feb 6, 2009 in Renting & Real Estate
Berry asked:
My husband and I are going in to meet with a mortgage program. He is one of the participating lenders with the state that can help us with a special loan that the state gives for teachers. Should he run our credit? What if we don’t like him and want to use someone else, and they have to run our credit? Also, at what point do I ask him for that good faith estimate sheet? I am reading books on it, but this is all really overwhelming and I don’t want to be taken advantage of.
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My husband and I are going in to meet with a mortgage program. He is one of the participating lenders with the state that can help us with a special loan that the state gives for teachers. Should he run our credit? What if we don’t like him and want to use someone else, and they have to run our credit? Also, at what point do I ask him for that good faith estimate sheet? I am reading books on it, but this is all really overwhelming and I don’t want to be taken advantage of.
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Short version: you cannot get an honest, legal answer (seriously, it’s a federal law) without pulling credit, that requires that mortgage lender pulls your credit to shop a loan for you. They cannot quote fees, costs, interest rates, almost anything until they know that you can qualify. Legally in all 50 states, they only have 3 days from the point that they pull credit to issue a Good Faith Estimate, and once again, that’s federal law…
Also, EVERY Bank has the Teacher next door program, you don’t like him, drop ‘em… But don’t sit there and shop around for a lower payment or interest rate or anything like that for too long or with to many people or your credit rating will take a nose dive from all of the credit pulls. Each time past 3 can really mess you up, and you don’t have any way of knowing what your status is without one.
If you want to check a site out I would recommend this one:.
Amerisave.com doesn’t have a single up front fee other than a lock fee to do the loan. You get to pick points, rate, fee, payment, closing costs, the whole deal is under your control… from start to finish.
They are lic. in all 50 states and DC, and they are awesome! They even do the Progressive Auto Insurance thing and compare their rates with everyone else today, right in front of you, as soon as you open up the webpage…
Good luck, and don’t get too worried about it. It does cost money to buy a home, but it doesn’t have to be terrifying.
docusrex | Feb 6, 2009 | Reply
The lender does have to run your credit. He should give you a GFE within 3 days if not at the time of your first visit. You are not required to use him if you don’t like him- I would check him out through the BBB ahead of your meeting. It sounds like you are going for a “my community” or “Home Possible” loan (?)- Really great program. Take proof of last 2 years income (W’2′s & recent paystubs) also your last 2 months full bank statements (with no NSF fees! They are looking to verify that you have the money that you will need to close in the accounts (down payment/closing costs if applicable. Be ready to spend an hour or two. Good luck! Great question.
Beverly S | Feb 9, 2009 | Reply
By federal law, you are entitled to a Good Faith Estimate within 3 business days. But be advised that this is just an estimate, there are fees that can change such as origination fees, title fees, and recording fees, depending upon who is completing the GFE. Some fees should not change such as underwriting and attorney fees. To be honest, your credit must be pulled, NO ONE can give you an accurate rate without pulling your credit. They can QUOTE you all day long, but without your credit being pulled, it’s worth nothing. Be advised though, that you do not want your credit being pulled too many times, while it will not destroy your credit, the reporting agencies do frown upon it. If this guy does pull your credit, you are entitled to a copy of it, so if you do not like him, request a copy from him, he must give it to you. If you do not like this guy, ask around your friends, relatives, your entire network to see if anyone knows of an honest mortgage broker. They have access to thousands of programs and will be able to shop you around to find the best possible program for you while only pulling your credit once, they can even shop you to bank of america or countywide who, if you qualify, have no closing cost programs available. Best of luck
Jeromy W | Feb 10, 2009 | Reply
I am sure that there are many lenders on the list. Call a few and see who you feel most comfortable talking to. Be sure you are qualified for the program in terms of income limits, etc. before you allow anyone to pull credit.
Yes, it is necessary to have your credit pulled once you find someone you want to work with and, no, you are not commited to use anyone just because they pulled your credit or gave you a GFE.
If you have your credit pulled by any number of mortgage lenders within a 2 week time frame, the inquiries should be scored as 1. This is the case because the credit bureaus understand that people will shop for credit so don’t be too afraid to shop with a couple of lenders. Just do it quickly.
I can pre-qualify someone based on a conversation and provide a GFE that is subject to verification of the information they provided me so pulling credit is not a must, but if you want to avoid any surprises it would be a good thing to allow the lender(s) you choose to pull it.
The bond money program in Ohio is a great first time buyer program. It has a special discount for teachers (0.25% better rate) and there is really no competition in terms of rate. For instance, if the basic bond money rate is 5.875% with 1% origination, teachers get 5.625%. The only difference from one lender to another might be the “junk fees”. Appraisals cost what they cost, title insurance is required, there might be a commitment fee, closing fee, recording fees, doc prep charges, etc.
Be sure to inquire about income and purchase price limits. Most of these programs have them. You certainly don’t want to get too far in to the process and then discover you make too much money.
You shouldn’t need to read a bunch of books. Just find one trust worthy, experienced loan officer and you will be in good hands. Ask friends and family who they have used and whether they would recommend them. Ask your Realtor if they have anyone they would recommend that provides that program you are interested in. Let them take the mystery out of the process. It is really not that complicated.
Bring your tax returns, W-2′s and pay stubs, bank statements and any other information the lender needs to the initial appointment so that they can double check everything before you go out and write a contract. This will save you a lot of back and forth through the process and ultimately make it a less stressful process for everyone.
Good luck.
Dale H | Feb 11, 2009 | Reply