Best place for Mortgage Loan?

Question

Hello all,

I'm creatively looking for a place, but this one is to live in.

I am in Southern CA, 760 credit or above, and looking for a reputable lender to get a prequal from and then use.

Am I looking for deals to take Sub2 or banks wanting to dump inventory by year's end? You bet. But working with a realtor for fixer uppers may also net me a good deal as well. I'm looking at anything with a 20-25% equity already there, that needs cosmetic work.

Am I on the right path?

Also please no solicitations like "give me a call, I'll help you out!", just referrals.

I'm hearing the rates are under 4% for great credit so the timing seems good.

Thanks!

Curtis

Zachary Dosch · Answer

Yes, FHA requires a higher level appraiser and they are much more critical of the property (at least in my experiences).

I have been going through Wells but that is basically because I like having all of my "stuff" together at one place. The underwritting is a little more strict and there are some more hoops to jump through but I have a good relationship with the LO and he knows my situation so things usually go more smoothly than the average transaction.

Unfortunately, Its most likely going to be local brokers that will be able to be the most flexible with their underwritting terms and they just sell the loan right away (most of the time to Wells) so they really won't be held accountable for anything. However, its those same people that are often times the most sneaky and deviant so make sure you get a GFE to compare because that will most times hold their feet to the fire.

Curt Davis · Answer

Im not an FHA expert but I dont think a home that is a fixer upper will pass FHA inspection thus you wont be able to buy one like that.

Curtis H. · Answer

Very useful info Ed. All of which I will follow your advice.

I'm thinking conventional is the way to go if I can stomach the larger down payment.

Thanks

Ed O. · Answer

Oh, they always said you could get the best deals form tues-thurs. Rates on mon and fri tended to be less favorable, all things equal.

Ed O. · Answer

As a former mortgage guy, not crooked enough to make a lot of money in the business, I'll give you a few suggestions.

1. Get your prequal from a reputable person. Don't worry about rate at this time - you can't lock until you have the property under contract. 
2. When you have identified the property you will buy, then, shop rates on the day you're ready and willing to commit to working with a lender. Do all of this work in the shortest time span. If you get rates on different days, you're not comparing the same offers, as rates move every day. Get a good faith estimate from everyone and compare fees, etc. 
3 MOST IMPORTANTLY Tell the prospective lenders, I'm shopping between 10 lenders and am going to take the best deal I get by (deadline time). Do not let them run credit or give your social until you have selected the lender you're going with.
4. Avoid bank of america and chase, in the same way you'd avoid death. They absolutely suck. I would take a worse rate and work with someone else before working with them. Their mortgage divisions are run the way I would run it if I was trying to go out of business. 
5. If you're hoping to buy a lot of RE, consider working with a local, smaller bank. The big banks could care less about tough investor deals. Some locals are still doing favorable deals for investors. 
Good luck.

Curtis H. · Answer

Thanks Mitch!

That help put it in perspective. The benefits to FHA aren't all that much compared to conventional it seems. However their rates seem to be better. I'm getting 4.25% for conventional, vs 3.9% on FHA. That's a lot on a $300K home over 30 years.

Now, anyone got referrals to good lenders? This is the part that scares the crap outta me. This is where if you are not careful you run into the crooks of all crooks. I know there are good ones out there.

Mitch Kronowit · Answer

With FHA you pay a 1% premium up front (added to the loan) the a Mortgage Insurance Premium (MIP) of 1.15% per year.

Curtis H. · Answer

One thing to add.

Is a conventional loan or FHA loan best? I don't want to put 10-20% down payment, and if that's the case isn't FHA the only way to go? Does FHA make you pay PMI like conventional loans?

Thanks!