Help with buying first home please!?

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I am a 25 year old female looking to purchase my first townhome for $ 70,000 in south florida. I am putting down 20% and getting a 30 year fixed rate conventional loan. I got preapproved and a GFE today with Guaranteed Rate for 5.3% interest rate. I heard they are a good mortgage company through referrals and they do not charge fees or discount points. I had a quote from a mortgage broker affiliated with Wells Fargo and the closing costs were more but he gave me a 5.1% interest rate. However the monthly payments were only about $ 13 difference in price. The Wells Fargo guy is not willing to work with me and told me to shop if I want to. Everyone is telling me (family and friends) that since this loan is so small ($ 56,000) my monthly payment and closing costs will not make much difference in price. Guaranteed Rate is charging me less for appraisal fees and some other fees when I compare to the Wells Fargo rate but who knows. I barely understand this stuff and am not paying an attorney to look at it. I’m not sure what to do. I was going to try getting a quote with Bank of America but I heard they don’t process anything in house so the closings are usually delayed and they charge discount points. I am new to this and don’t really understand any of it so any advice would be much appreciated. Should I use Guaranteed Rate Mortgage Co. or keep shopping? My closing is Feb 28. We are already under contract.

  1. Reply
    richard t
    May 15, 2011 at 1:28 am

    First congrats on your new home. There are great deals in South Florida so hopefully your experience in buying will be positive. I would forget Bank of America. From my experience they or Chase will not have the best deals. I would ask one of the credit unions in your area or at least try a regional bank like BB&T. I would hope your fees would be less than 3,000 and perhaps you might get an interest rate around 5%. With that said, South Florida has been hammered and at it sounds like your 5.3% is at least reasonable. Make sure there are no prepayment penalties just in case you do decide to pay some of it down early.

  2. Reply
    May 15, 2011 at 2:06 am

    Since you have applied for a mortgage loan with two difference companies, the only way you may see which is a better deal and you are paying the less in fees and points is to request from each a Good Faith Estimate (GFE), this document will give you an idea as to all the points, fees and other items that could be charged to you. You should also request a Truth In Lending (TIL) this document will give you the Annual Percentage Rate (APR) the lower the APR the lower the cost of the mortgage loan would cost you.

    This would give you a birds eye view of which in the long run would less costly. Even though one mortgage loan application might have a lower interest rate the points and fees would raise the cost of the mortgage loan.

    You might consider a FHA mortgage loan. This is a popular mortgage loan where the down payment is approximately 3.5% down. This would allow you to possibly keep some of your money in a financial instrument for emergencies and other possible unforeseen financial difficulties.

    While speaking with your mortgage loan officer make sure you get your pre-approval letter.

    Because others had difficulties with certain lenders do not mean you will find the or have the same problems, therefore if you feel the need to continue to shop for a mortgage loan the decision should not be based on anothers experience, especially if you do not know them.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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