How do I know if I am getting a good home loan offer ?

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I am about to start looking for a home loan,mortgage offers.
When getting the quotes from different banks what are the main points I should be looking at the quotes, to make sure I am getting the best offer ?

APR,interest rate,closing costs,fees ?

  1. Reply
    April 29, 2011 at 11:12 pm

    If the seller or someone else is paying your “closing” costs, that’s a good deal! You can negotiate that and you should be working with a mortgage broker or wholesale person. Banks tend to charge you “retail” and you might not get the best deal. In this market, your 30 year fixed rate should be in the 5.25% range. Your APR will be higher than this amount, as the government requires that any finance costs over the term, be reflected in that APR rate over the term period of your loan. If you get a 5.25% fixed, your APR should still be well under 6%. Your best offer is always going to be your fixed interest rate, and least cash out of your pocket, my opinion.

  2. Reply
    col. Kurtz
    April 29, 2011 at 11:37 pm

    Mortgage Brokers are like the Health Insurance Industry, the worse they screw you the bigger their year end bonus is!!

    Although they all tell you they are “shopping” your loan for the best rate, the truth is they’re shopping to see who will give THEM the best reward for bringing your loan to them!!

    Here is a good example: here in Calif which is a costly state in which to originate a loan: Based on today’s rates, the broker can offer you 4.5% (his cost, wholesale) for a 30yr fix. He would decide how much to charge you, his profit, to prepare your loan application for submission. He can charge .5% to 3% of the loan amt depending on if he wants to go to Hawaii or Tahiti for vacation!!

    Banks already build their costs into the rate they’re offering you (retail) so dont let them add an origination fee or discount fee on top of their already “built-in” profit! If they tell you “they are paying” your closing costs, its HOG-WASH! they need to price your loan at a higher int rate to gain back what expenses “they paid” for right out of your hide!!

    There is no free lunch! just ask the folks who got into the Exotic Mtgs that started at a low “teaser” rate then were Adjuted up and right out of their homes a few yrs later!

    Use the APR to compare and contrast when shopping for a loan. And they are supposed to give you a Good Faith Estimate GFI, w/in three days of application so you can see their proposed charges! That is where you can do you own personal “Line Item Veto” all the junk costs out of your brokers offer to you !!

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