[JMT]

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Originally Posted by Edwood When applying for loans, can I apply for multiple pre-approved loans and pick the one I like?

Most lenders will require you to pay an application fee.
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Originally Posted by Edwood I think Bank of America is out. They listed $11,663.95 in closing costs?!?!?!

Their estimate is purposefully high (I worked for Bank of America for 25 years...until recently). In fact most, if not all, good faith estimates will be on the high end. Also keep in mind that:
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Reserves - Items Used for Escrow/Impound Reserves - HUD Series 1000 Subtotal $1,778.01

Is simply an impound reserve to pay your taxes and insurance. As your property taxes and your insurance premiums are estimates only, lenders will require a reserve to make up for any underestimation. Also, if you fail to make your impound payment (for whatever reason) the lender will use your reserve to make sure that taxes and insurance is current.
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Items Payable in Connection with Loan - HUD Series 800 Items Payable in Connection with Loan - HUD Series 800 Subtotal $6,565.80

That sounds like points and origination fees. You can talk to your banker and ask them what other pricing options there are. Trust me when I say there are literally hundreds of different pricing options.
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Do I need to worry about the place I get a mortgage from going out of business?

Not really, unless they go out of business before funding your loan. Also, if your loan gets sold and they contract with a servicing agent, it might be a tad difficult in obtaining aged information if your original lenders bites the dust. I wouldn't fret over that issue though.

 

[dariusf]

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Originally Posted by Edwood Do I need to worry about the place I get a mortgage from going out of business? -Ed

I paid around $900 but most places from what I have been quoted and told by friends charge from $1500-2000

I think most if not all smaller mortgage companies are like dealers reselling mortgages from varies banks. So you are actually getting the mortgage from a bank or some other larger institution like a credit union etc. Lots of them also sell mortgages, I had this happen to my two previews mortgages. This time I just went directly to a bank and I think I saved quite a bit in closing costs and got a great rate as I mentioned in earlier post. Some places really take you with some fees. Like $300 for paperwork, or $300 appraisals etc.

 

[dariusf]

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Originally Posted by JMT Is simply an impound reserve to pay your taxes and insurance. As your property taxes and your insurance premiums are estimates only, lenders will require a reserve to make up for any underestimation. Also, if you fail to make your impound payment (for whatever reason) the lender will use your reserve to make sure that taxes and insurance is current.

With my last mortgage I refused to use escrow account for taxes as I like to pay them myself and they wanted to charge me $300 to 'remove' this option. I refused and they did it for free

One of the things I really liked about the ING bank was their statement that they believe one can manage to pay their own taxes therefore they did not use the escrow accounts

"impound reserve?" I would personally never get a mortgage from anyone requiring something like this.

 

[Edwood]

Well, we put in an offer for a large 1 bed 1 bath condo in San Pedro North. Just south of Rancho Palos Verdes. Man, one other already offered, but their credit wasn't so good, and they couldn't put much down. Another person might be putting in an offer as well. Bastiches.

We are putting down $7500 "good faith deposit" to hold that sucker. Hopefully they bite. Is this a common practice to put down some money to "hold" a property?

Hopefully all goes well. The closing cost estimates are whacked. $5000 is a bit much. Gonna have to haggle some more. We were up till 11pm with our real estate agent. Everything is moving so fast now, my head really hurts.

Having work tonight did not help either. But I have to pay for the condo some way. The price is more within our budget. So we'll be able to go with more conservative financing like 30 yr fixed and 7/1 ARM, rather than interest only, which would make me nervous.

-Ed

 

[Edwood]

Here's a stupid question: are 30/7 yr fixed and 7/1 ARM the same thing?

-Ed

 

[dariusf]

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Originally Posted by Edwood Well, we put in an offer for a large 1 bed 1 bath condo in San Pedro North. Just south of Rancho Palos Verdes. Man, one other already offered, but their credit wasn't so good, and they couldn't put much down. Another person might be putting in an offer as well. Bastiches.

congratulations, hopefully you will get it

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Originally Posted by Edwood We are putting down $7500 "good faith deposit" to hold that sucker. Hopefully they bite. Is this a common practice to put down some money to "hold" a property?

we did but it was like 1 or 2k

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Originally Posted by Edwood Hopefully all goes well. The closing cost estimates are whacked. $5000 is a bit much. Gonna have to haggle some more. We were up till 11pm with our real estate agent. Everything is moving so fast now, my head really hurts.

No way, thats way too much unless you are paying points to lower the interest rate. Did you check the ingdirect.com bank I just closed with? Like I mentioned the closing cost was only about $900 (thats over 5 times less) and on top of that their rates are really good.

 

[dariusf]

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Originally Posted by Edwood Here's a stupid question: are 30/7 yr fixed and 7/1 ARM the same thing? -Ed

I would think so, the 7/1 ARM is like the 3/1 ARM I just got but you get a fixed interest for the first 7 years and then for the 27 years its variable depending on the market and what ever rules the bank sets up with your mortgage. We had some limits on how much up can it go etc.

We took the 3/1 ARM as we are planning on selling within the next two years anyway and we got a little smaller interest with the 3/1 then the 5/1 or 7/1.

 

[JMT]

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Originally Posted by Edwood We were up till 11pm with our real estate agent. Everything is moving so fast now, my head really hurts.

Just wait, you think your head hurts now, wait until they accept your offer and you start really getting into the loan process.

But, at the end of the day you will be glad that you did. There is nothing like owning your own home. Congratulations on your offer, I wish you the very best.
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We are putting down $7500 "good faith deposit" to hold that sucker. Hopefully they bite. Is this a common practice to put down some money to "hold" a property?

Whether it is high or not depends on how much your offer was (maybe you posted it and I completely missed it), but a "good faith deposit" is standard when making an offer. Keep in mind too that your deposit simply gets credited to the purchase price of the home once escrow closes. So it's not like you are out of pocket $7500.

 

[Edwood]

Ugh, the seller is making a counter offer.

"contingency period on loan to be removed after ten days of acceptance"
"inspection period to be removed ten days after acceptance"

What exactly does that mean? My real estate agent says that the contingency period means that I can back out of the deal and get my money back with those ten days (we could ask for an extension if needed, but it would be at the sellers discretion). But after that if I backed out, they could keep my deposit. Unless we went to arbitration.

Does that sound right? Is this fair? It's also calender days and not work days, so we lose out on one day at least. (most things aren't done on Sundays of course.)

-Ed

 

[dariusf]

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Originally Posted by Edwood Ugh, the seller is making a counter offer. "contingency period on loan to be removed after ten days of acceptance" "inspection period to be removed ten days after acceptance" What exactly does that mean? My real estate agent says that the contingency period means that I can back out of the deal and get my money back with those ten days (we could ask for an extension if needed, but it would be at the sellers discretion). But after that if I backed out, they could keep my deposit. Unless we went to arbitration. Does that sound right? Is this fair? It's also calender days and not work days, so we lose out on one day at least. (most things aren't done on Sundays of course.) -Ed

I think thats not bad. Don't really know if this is standard 10 days. We did make an offer for one place few years back and put down $1000 deposit. I think we had 3 days to backout and we wanted out of the deal in a week as we found something else that we like much more. It was being sold by the builder and they did give us back the deposit which they did not have to do. The problem with this is that if for some reason you will not get the mortgage or really need to get out of the deal after the 10 days, its up to the seller to give you your deposit back and its quick cash for them. I would give it back but who knows if they would. I would make sure you can get the mortgage and that you really want the place before risking $7500 big ones.

 

[Edwood]

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Originally Posted by dariusf I would make sure you can get the mortgage and that you really want the place before risking $7500 big ones.

Yeah, just think of all the Head-fi goodies I could buy with that. Either way, my headphone purchases are going to be limited in the near future. The closing costs and down payment are eating everything up.

But I have some pretty nice toys aready that I'll be able to enjoy in a new and peaceful home.

-Ed

 

[JMT]

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Originally Posted by Edwood My real estate agent says that the contingency period means that I can back out of the deal and get my money back with those ten days

10 days should be ample time as a buyer. Essentially the seller is trying to protect themselves against you going out and finding another property while they sit there unable to accept any new offers. One thing you want to check with your agent is regarding loan approval. What, if after the 12th day, your lender decides that your cash flow ratios are not sufficient and they decline your loan. I would have your agent counter with some wording that protects you.

Keep in mind that you can put any type of reasonable counter language in the contract that protects you as a buyer. Your agent will/should advise you as to what is reasonable and what is not. You are in the midst of contract negotiations now, and now is the time to make sure that you are comfortable with a deal. Once both parties accept, then it becomes a legally binding contract.

To give you an example, when we purchased our last home we noticed that they had dogs. So during the negotiations we put in a counter-offer that the carpets had to be professionally cleaned (at their expense) within a week prior to close. We also had them pay for a home inspection and set a dollar limit of $3000 for any necessary repairs that they would be responsible for.

So make sure that your agent is right there advising you.

 

[Edwood]

We gave him all of our info (Tax returns, bank statements, pay check stubs, ID's, etc.) for the loan application process.

Given our credit ratings, our real estate agent is overly confident that we will get a loan approval very quickly.

My fiance is shopping around at a lot of different lenders now. I think whe is having better luck than me.

Funny, I did most of the shopping around for the property, she is haggling the finances. Sweet tag team combo.

-Ed

 

[RYCeT]

Edwood, for mortgage try to check with HSBC. I just close a mortgage for my parents on HSBC Philadelphia branch today, they got a loan program named CRC loan (Community reinvestment loan) for first time homebuyer. Our mortgage apr is 5.875% with 3% down and no points, which is very good in this market right now. The loan processing fee is $300.00 Hopefully HSBC have the same program down there in California.

 

[Edwood]

My fiance is finding the most favorable deal with our bank Washington Mutual. They are a lot more flexible it seems since they have access to our banking records more easily. And the fact that we've have accounts with them for several years.

-Ed