Orlando Mortgage Blog


April 26th, 2019 12:56 PM by BILL WILBANKS

A typical home shopper will probably use the expertise of a local realtorĀ® in their home search, who in turn will recommend a loan rep they know to get you started, so they can begin to show properties within the customer's means. This is a good start.

Here are a few tips that can likely save you thousands at the closing table:

  • You don't have to wait until you're ready to start home shopping to prequalify. In fact, I recommend anyone thinking of buying in the near future do a little serious price shopping before deciding on who to prequalify them. Why waste the time if you wouldn't use them anyway? It's easy to shop mortgage rates and costs online today. Using a local loan rep who knows your market is highly recommended. Know your credit score? You can shop quotes without anyone pulling your credit.
  • Conforming conventional and government loans are the standard everywhere. It really comes down to two important factors. Your comfort in working with a given loan person and the rate and bottom line price they offer you. Though most people believe mortgage pricing is the same everywhere. IT'S NOT.
  • A 4.00% rate is a 4.00% rate everywhere. What's the difference? It's the points, rebates and closing costs offered that vary so much. Shop the bottom line cost on the loan. For example, most loan reps today will give you a rate quote that earns the house at least 2.00% to 3.00% (points) of the loan balance to cover the company overhead and their sales fee. On a $200,000 loan that's $4,000 to $6,000 to do your loan. You may not see "points" since you are offered a higher rate that covers it. The rate needs to be 0.25% to 0.50% higher or more to do so. But, my business plan and low overhead has allowed me to change the playing field for 25 years. How? I pass on more of the available lender rebates instead of keeping them myself. That could save $2,000 to $4,000 in costs through the increased rebate to your closing costs, a better rate or both that the savings buys you.  You didn't know there was this much difference did you, especially on the zero closing costs quotes offered everywhere today? Zero costs, but at what interest rate?
  • Your realtor will likely recommend you to a loan rep they trust. You should contact them. Now request their price estimate at this point to then comparison shop who you actually want to handle your loan. But you did your homework and have all your facts at hand to compare . You're not rushed last minute with a contract pending. You've taken back control and should end up with a closed loan to brag about.
  • Resale and new construction seller paid costs. Here in the Central Florida area on a resale the seller will typically agree to pay standard and customary costs for you such as the Owner's Title policy, doc stamp taxes to transfer the deed and a title search, though it may vary slightly depending on markets around the state and could easily be +/- $3,000. Builder offerings on new construction can also vary. Some builders require that you only use their approved lenders for your financing, but offer various sales incentives if you do so, but take them away if you use your own lender. Of course, any builder incentives are already rolled into their sales price, but wanting to control the process, it may lock your decision. Don't expect the builder loan pricing to compare to an outside source, but the incentives may keep you in their deal on balance. Some builders will pay some of your standard and customary costs and still allow you to shop your financing elsewhere. Lastly, some builders pay nothing towards your costs and allow you to place your financing anywhere. Ask up front in writing what your builder's offer entails and then compare.
  • Finally, don't wait till the last minute. Once a contract offer is accepted you will normally only be given around 5 days to make application for your financing. Most buyers who have failed to shop to this point and most do, never compare pricing and simply go with whoever was recommended, possibly missing thousands at closing. You can still shop now, but why put yourself in a crunch? You work too hard for your money. Shop early. It's worth it! I've proved it for 25 years.

Posted in:General
Posted by BILL WILBANKS on April 26th, 2019 12:56 PM


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