Hello: Can I please get some assistance. We are in the process of putting our house for sale and buying another. I am on the Pre-qualifying Process so more than likely my actual credit has not been used, ( if I am mistaken please correct me ). The next step will be to get Pre-approved ( I assume that is next since I've been given a list of documents to provide the mortgage broker to verify income). My main goal aside from getting a good house is buying points to lower my interest in order to maintain a comfortable payment, but I also want to shop around with different lenders for the best deal. I plan on checking with two other different lenders besides the one that I'm going through right now. Any advice will be greatly appreciated.

Thank you in advance

MEB4

RetiredNavy

My wife and I was denied a loan due to the number of credit inquiries. When we pulled our credit report, 7 where from mortgage lenders shopping around, 3 from a furniture store because the idiot processing our loan messed up with the application three times and one for a credit card. If FICO states that it should only count as one, then Equifax and TransUnion are not following that. The mortgage credit inquires stated 2 years to remain on your credit report.

Dr D

Yes the labyrint of FICO scoring is confusing, to say the least. Untill a few years ago the whole system was a closely guarded secret. The keeper of the system felt that if consumers knew how the scores were arrived at, that they would change their behavior in order to "manipulate" their scores. That is akin to playing a baseball game without knowing what the rules are. Fortunately, too many inquiries comprise a small part of your credit score. Be advised not to borrow from a "finance' company, because that can drop your score. Much of the paper for 90 days same as cash, is sold to finance companies, which can drop your score. The main things are to pay on time and not use too much of your available credit.

MEB4

Thank you all! I really am paying close attention to what is being said in answer to my posted question. I am working through a local mortgage broker and plan on contacting two more banks, one of which is currently financing our house. Other than that I don't plan on doing anymore inquiries. Unless I am mistaken, by me working through a mortgage broker directly my loan could end up being sold w/in a few weeks (as that is what happened with my current home loan) is that correct?
Last time I did not pay any close attention to what was being done or how it was being done as long as we got a comfortable house payment with the house that we wanted. In this instance I plan on thoroughly researching my options and not limiting myself to what only one person says that I can get... I have made sure all my payments are made on time with my current mortgagor, but also have good faith in the assistance that my bank provides to its members... this is why I am certain that if I do "shop around" I will not go past the three finance options that I have in front of me.

I am still confused on the point buy down though... the first time my mortgage broker quoted me she gave me a 7% int on the quote. Within 2days she called and advised me that we were pre-approved for a 30year loan with a 6.25% interest... After reading up on it that evening I mentioned to her the next day that I would be interested in buying points to lower my interest. I was told it was good to do that and that to bring it down to a little over 5% ( I don't remember the exact percentage...)that I would need to pay an approximate $4,500.00 plus the closing costs.

I plan on selling my current home and price it accordingly hoping for a quick sell... the market is favorable for buyers and I am confident that I can find a good house for a good price in the area that I want. I want to inform myself as much as I can so that I may get what is best for my family and I. THANK YOU FOR ALL OF YOU FOR PROVIDING ME WITH YOUR OWN EXPERIENCES AND KNOWLEDGE.

My most sincere thanks,

MEB4

ScottGem

Basically, lenders are willing to give a lower interest rate if you pay some of the interest upfront. Just for arguments sake, lets say that at 6.25% you will pay $150,000 in interest over 30 years. Over the 1st 2 years you might be paying $14,000 in interest. At 5%, your total interest might drop to $125,000 with $12,000 over the 1st 2 years. So the lender winds up with $2500 more upfront that they can invest in other mortgages. That's the advantage to them. The advantage to you, is that you pay less in total.

If you plan on staying in your home for a long time, then paying points to lower your rate is a good idea. However, if you expect to move within 4-5 years, don't do it.

Disclaimer: those numbers were made up just for explaining they would not equate to any real loan.

Home Retention Agency

You need to make it absolutely clear to these other people that you don't want them to pull your credit more than once.

Also, when they know that they're competing for a loan, they'll often quote rates that creep up by the time you reach the closing table. You usually don't find out about this until you're actually looking at the docs.

Make sure you get a Good Faith Estimate from whomever you choose, along with a list of any conditions for the pre-approval.

Seeing as how you haven't sold your house, your pre-approval will likely expire and you'll have to re-apply by the time you are able to execute a purchase.


Count on it... even if you get your loan from a bank, there's no guarantee they'll carry it in their portfolio. Even credit unions sell a percentage of their loans.

Where did you hear that this is a good idea?

I suggest you stay in "homework mode" until you've thoroughly researched this topic. I believe Ric Edelman addresses this topic in one of his books... The Mortgage Professor may have a calculator to help you figure out if this makes sense... bottom line, it rarely is a good idea to buy down the rate. Furthermore, I believe that you have to write off the points over a period of years, rather than taking a full deduction in the year that they were paid.

MEB4

Sorry for the delay in responding. I do thank you all for your assistance! Than you Home Retention Agency... I continue my search for what's best!

-MEB4