Need feedback on deal

8 Replies

Bought my first 2 properties and and went through a lender that my agent recommended. He seemed really good and I was naive and didn’t shop around. How bad did I do? And any recommendations on what I could do besides shop around next time?

Bought 2 homes in the south. Did not factor credits from the seller.

1st closed 7/26 105k 5.15% closing costs about 6k - renting for $1050 a month.

2nd closed 9/3 84.5k 4.85% closing costs about 6.7k - renting $1000 a month.

It didn’t make sense to me why 2nd closing was more even though the houses are a few blocks from each other and it was less.

If there is any material you recommend on this subject feel free to add as well. My goal is 21 properties and even if I missed a little here I plan to learn from my mistakes and knock the next ones out of the park.

Promotion
BiggerPockets
The one-stop-shop for REI
Find Local Home Improvement Pros!
Check out our network of trusted, local contractors for all of your home improvement projects.
Find a Contractor
Originally posted by @Luke Treacy:

Bought my first 2 properties and and went through a lender that my agent recommended. He seemed really good and I was naive and didn’t shop around. How bad did I do? And any recommendations on what I could do besides shop around next time?

Bought 2 homes in the south. Did not factor credits from the seller.

1st closed 7/26 105k 5.15% closing costs about 6k - renting for $1050 a month.

2nd closed 9/3 84.5k 4.85% closing costs about 6.7k - renting $1000 a month.

It didn’t make sense to me why 2nd closing was more even though the houses are a few blocks from each other and it was less.

If there is any material you recommend on this subject feel free to add as well. My goal is 21 properties and even if I missed a little here I plan to learn from my mistakes and knock the next ones out of the park.

There's nothing wrong or unusual about working with a lender who your Realtor has had good experiences with. Realtors hold the hands of a dozen or two people a year getting mortgages, they've seen the good, the bad, the ugly, and don't want you to be one of the latter two.

Realtors tend to look at 1) communication, 2) reliability, 3) speed, and 4) rate/fees when looking at loan officers. In about that order. No communication = no timely preapproval letter = no going into escrow. No reliability = not closing = grats you just wasted a bunch of time. Can't deliver on speed = can't write an offer that's attractive to a seller = can't get into escrow. Client being charged an absurd rate = client goes to a jenky internet lender = client doesn't actually close on the purchase. 

In all probability, you did just fine by working with your Realtor's go to lender. Could you refi in six months with a jenky internet lender to save $11.74 per month? Sure, maybe, assuming it actually closes, and you might gain some new appreciation for how comparatively smooth and easy it was working with your Realtor's go to lender while you're at it. Is that the highest and best use of your time? Up to you.

First time homebuyers, to their detriment, think you just push a button and get a mortgage, so why not just go for the lowest rate? Lo and behold, this is why something like 1 in 3 preapproved buyers does not actually close escrow (source).

@Frank Geiger

I wish I could attach a screenshot of them. Using mobile is this something I can via my laptop?

It was 2 pts. I think the difference was prepaid a we’re 1k higher and they are identical properties so to speak. I’m working on buying a place where I live and was told closing costs are between 2-4 percent which sounds a good bit less than what I got on these.

Originally posted by @Luke Treacy:

@Michael Kinsella

Just a lender I assume, residential investment group. They sold my loans to Chase via the Fannie Mae after.

 Back when I was a retail lender, I sent a lot of investment property business through Chase correspondent (correspondent = hybrid between brokering and banking) - there are people reading this who have mortgages I originated that are serviced by Chase. :) 

You did good. Calling Chase directly would have driven you bonkers with the big bank nonsense (& as your Realtor will tell you, never would have closed on the contractually obligated timelines), but when they outsource the loan origination to a firm that employs people who are actually good at mortgages (basically what happened here), it works out fine.

@Chris Mason

Thanks Chris, the process couldn’t have gone any smoother. Great communication all along the way. Both closed in less than 30 days. Really enjoyed working with my lender. But since I was, and am still so new to this I’m not entirely sure how to gauge whether I got a good shake. I’m the last one to say it’s all about the money. I provide a service for a living so I get it.