Questions to ask Mortgage lenders for low rates you see online????

Kra5hnburn Posted: Apr 04, 2005 12:28 PM

Questions to ask Mortgage lenders for low rates you see online????

I've seen so many low rates online. I know some will be legit and some will be full of fees and extras. I just don't know the right questions to ask when I call about the online interest rate to tell the difference. Anyone go through this or know what those hidden extras would be? TIA!

DjPiLL Posted: Apr 04, 2005 12:42 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Just ask for a good faith estimate which lists all their fees. Also ask them how long you can lock a rate in for... is there a charge to lock... and if there is a charge to extend it.

LuvMyMichael Posted: Apr 04, 2005 12:46 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Posted by DjPiLL

Just ask for a good faith estimate which lists all their fees. Also ask them how long you can lock a rate in for... is there a charge to lock... and if there is a charge to extend it.

When do you get the good faith estimate? Is it after you sign the contract?

DjPiLL Posted: Apr 04, 2005 12:48 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Getting your mortgage has nothing to do with the timing of the contract.

You can ask for GFEs even before you pick the house out. Any reputable bank or broker will give you a GFE.

LuvMyMichael Posted: Apr 04, 2005 12:49 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Posted by DjPiLL

Getting your mortgage has nothing to do with the timing of the contract.

You can ask for GFEs even before you pick the house out. Any reputable bank or broker will give you a GFE.

Oh, ok Thanks.

KimberlyBride Posted: Apr 04, 2005 02:45 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Actually it is better to have the house before you get a good faith estimate so they can base the closing costs on the house purchase price.

Also ask if that rate involves paying any points up front.

For me we got our bid accepted, signed the contract, applied for a mortage, received a firm commitment letter and good faith estimate from the lender.

KimberlyBride Posted: Apr 04, 2005 02:48 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Posted by panapoli

Posted by DjPiLL

Just ask for a good faith estimate which lists all their fees. Also ask them how long you can lock a rate in for... is there a charge to lock... and if there is a charge to extend it.

When do you get the good faith estimate? Is it after you sign the contract?

Right you get a good faith estimate from the mortgage lender. It is basically an estimate of how much your closing costs are going to be. My good faith estimate was right on target with how much we paid in closing costs.

Any questions - I am here to help

Kra5hnburn Posted: Apr 04, 2005 05:04 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Does a good faith estimate tell you everything that could possibly be on there? Could a lender add stuff later on you weren't aware of/wasn't in the GFE and your stuck with it?

KimberlyBride Posted: Apr 04, 2005 05:12 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

When you sign the commitment letter everything needs to be in writing. They will state all the costs and you agree to them. There were no surprises for us. The good faith estimate should be very very close to the actual closing costs. It might vary depending on taxes (if the seller paid them already or not.) I would ask your attorney and the lender if you do not feel 100% sure.

littlewilson Posted: Apr 04, 2005 05:57 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Definitely get a GFE so that you can compare the bank fees/costs, and ask that the GFE explicitly state the rate, points (if any), and lock term. If you need a long lock (60, 90, or more days), then make sure that you're getting the rate and fees that go with that lock period. See if they offer a float-down options (when you are given a chance to float down to a lower rate during your lock period), and if any fees are added if you float down. Also confirm that you're talking about the appropriate loan amount, type (fixed/ARM, conventional/jumbo), and amount being put down. Also ensure that there are no pre-payment penalties.

A couple of examples of weird things that we've heard when actually getting the facts from low-rate lenders...

- One guy told us that his loan actually required an extra payment each year....in essence, he was selling a 27-year mortgage but advertising the rates under the 30-year category.

- One place got us oh the phone and went confirmed all of the rates, etc., then before giving us anything in writing, he called back to say something to the effect of 'oh, I just heard from my manager that for this high of a loan amount, we actually require 25% down, not 20%. Um...whatever.

skew Posted: Apr 04, 2005 06:01 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

also asl about orgination fees. just another way of wording 'pts'. i would also make sure that there is a no-prepayment penalty.

DjPiLL Posted: Apr 04, 2005 06:06 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Posted by KimberlyBride

Actually it is better to have the house before you get a good faith estimate so they can base the closing costs on the house purchase price.

Yeah but you can still get GFEs from lenders beforehand and weed out the bad companies. Just give them the purchase price of the highest amount you want to spend on a house. Then you know your closing fees will be around that figure or less.

You should have your bank picked out (or at least have an idea on a few places) before you find the house to avoid the hassle of shopping around while you are stressing a closing.

Besides.. a GFE even after you sign a contract will never be exact cause your fees will vary based on what day of the month you close on.

Kra5hnburn Posted: Apr 05, 2005 10:41 PM

Re: Questions to ask Mortgage lenders for low rates you see online????

Thanks everyone for the advice. I started calling around. Those rates on Bankrate.com--bogus. Those places with extremely low rates still had some good rates, but like one company needed 20% down to get it and another had thousands in lenders fees--something not listed on the rate board. There have been some really nice people who're sending me GFEs without a hassle, then there were those shady people you warned me about. This is such a frustrating/stressful process!!!! I'm never moving again after this! Thanks!