cottonmama Posted January 19, 2013 Share Posted January 19, 2013 We're first-time home buyers, and I'm confused by some of the details of getting a mortgage, i.e. -- 1. Do I need to shop around for the best rates before I get pre-qualified, or can I do that later? 2. Where should I look for lenders? I'm so used to reading reviews before buying anything, but I can't find any list of reputable lenders, and besides I'm reading that the big banks aren't the best place to get a mortgage anyway. Can I trust my realtor's recommendations, or should I ask friends with mortgages, or the yellow pages, or...? 3. If we roll closing cost and/or points into our mortgage, what amount matters for calculating the 20% we need to put down in order to get the PMI discount? i.e. if we got a $100,000 house, with 1 point ($1,000, right?) and, say, $4,000 in closing costs, would we need to put down 20% of $100,000, and take a loan out for $85,000, or would we need to put down 20% of $105,000? Thanks! Quote Link to comment Share on other sites More sharing options...
happypamama Posted January 19, 2013 Share Posted January 19, 2013 I'd ask friends for recommendations, but I'd also talk to your local bank or credit union. If you trust your realtor, you could also ask him/her. When we bought our first house, we were clueless about everything (we were actually intending to rent but couldn't find anything decent in our price range, and buying a fixer-upper was the better deal), and our realtor had a friend that was a mortgage broker. She recommended him, and we were new to the area so we didn't have any local friends; he turned out to be great, and we used him for that house and for our next house as well. ETA: I didn't comment on your other questions, because the last time I bought a house was 2006, before everything crashed, so I really don't know what the answers are these days. Quote Link to comment Share on other sites More sharing options...
Arcadia Posted January 19, 2013 Share Posted January 19, 2013 1. Do I need to shop around for the best rates before I get pre-qualified, or can I do that later? 2. Where should I look for lenders? I'm so used to reading reviews before buying anything, but I can't find any list of reputable lenders, and besides I'm reading that the big banks aren't the best place to get a mortgage anyway. Can I trust my realtor's recommendations, or should I ask friends with mortgages, or the yellow pages, or...? 3. If we roll closing cost and/or points into our mortgage, what amount matters for calculating the 20% we need to put down in order to get the PMI discount? i.e. if we got a $100,000 house, with 1 point ($1,000, right?) and, say, $4,000 in closing costs, would we need to put down 20% of $100,000, and take a loan out for $85,000, or would we need to put down 20% of $105,000? Thanks! 1) you can shop around after you are pre-qualified. The pre-qualification just gives a estimate of how big a mortgage you may qualify for. It does not guarantee you would get that amount when you actually apply for the loan. The pre-qualification also does not require you to give your W2 or SSN. 2) most realtors do get commision from the banks/lenders. I would compare but I would also ask friends. 3) the 20% is based on the buying price. so for a $100k house, it would be $20k down to avoid PMI. The points and closing costs do not affect the 20% calculation. Quote Link to comment Share on other sites More sharing options...
kbpaulie Posted January 19, 2013 Share Posted January 19, 2013 You can still shop around after you are pre-qualified. Ask friends, but call around to various locations. We've found that the Savings and Loan is always lowest for us - so see if you have something similar. Also check w/ credit unions (usually anyone can join these). You also may want to check out bankrate.com to get on-line quotes. I also LOVE their mortgage and amoritization calculator - let's me know what happens if I pay a few extra dollars here or there or the difference if we put just a little less down. You also might want to as the lender if they sell their loans. This means that you start our w/ bank X and end up w/ bank Z. While in general that's not a big deal b/c your terms don't change, I have found that when we refinanced they worked w/ us much better than another bank would have and I could go in and persoanlly ask questions. They've also worked w/ us as we've been looking for our 2nd house. Rates are SO, SO, SO low at this point in history I'd REALLY look hard to see if points are really worth it. They probably aren't. They are typically used when rates are high and you're trying to bring your rate down. Also, something I would have done differently. We would have come up with the $ to purchase title insurance. This protects you (part of closing fees cover title for the bank, not you). It's important as you're buying and important as you're selling. Best of luck and how exciting! Quote Link to comment Share on other sites More sharing options...
happypamama Posted January 19, 2013 Share Posted January 19, 2013 I think all of my mortgage companies have required title insurance. I definitely think it is a good idea. Also, OP, if you didn't know to already, do set aside money for a thorough home inspection. Ours have been around $300-$500, depending on what needed to be checked (radon and water in this house, for instance), and that will need to be paid separately from closing, so you can't finance it even if you're financing other closing costs. Quote Link to comment Share on other sites More sharing options...
Barb_ Posted January 19, 2013 Share Posted January 19, 2013 This is the *best* place to start for rates, payment calculators, articles, etc. http://www.bankrate.com/ Quote Link to comment Share on other sites More sharing options...
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