Your Questions About Mortgage Loan Rates

Sandy asks…

if i got pre approve for a mortgage loan do i have to stick with this lender ?

if i got pre approve for a mortgage loan from a lender.those this means that i have to take out my loan with this lender when the time arrives to get a loan for my home ? or can i still apply for other loans and options. also my home is been build now but the closing is not till november any suggestion for loans and different programs available for a first time buyer?

John answers:

It depends if you put anything down for the pre-approval, if not, then definately shop. You should have a GFE or a good faith estimate from the lender, use that to shop around to get a good rate and see if some fees can be lowered. If you do have an investment in the pre-qual, then it’s a matter of how much. Be advised to two things, the more lenders you go to, the more your credit will get pull, while this isn’t a major dent in your credit, it’s not smiled upon either. Last, rates are volitale and will remain so if not start to climb up, good luck

Ruth asks…

Is there a grace period when rate shopping for student loans where my FICO score isn’t effected?

I’m shopping around for education loan rates. When looking at different banks and having them pull my credit I don’t want my credit score to go down each time I have that institution run a credit inquiry.

I know when rate shopping for a mortgage you have 14 days to rate shop and have your credit pulled an unlimited amount of times. Does this apply to rate shopping for educational loans too?

Thanks!

John answers:

I think the mortgage period is a month. I don’t know if that applies to education loans. I would recommend contacting Trans Union, Equifax or Experian to be sure.

Chris asks…

Do I have to get my mortgage loan from the lender who pre-qualified me?

Do I have to get my mortgage loan from the lender who pre-qualified me? Also, If I have really good credit shouldn’t I qualify for the lowest interest rate?

John answers:

NOPE, you can use any lender, but don’t blow the time period in contract.
Yes, with good credit, low debt ratio, adequate income, stable employment, sufficient down payment, you should qualify for the best interest rate.

Thomas asks…

I plan to buy a house in about 6 months. How can I hedge against a potential rise in rates?

I expect that mortgage rates will rise over the next 6 months. I plan to buy a home for about $500K. Is there any way to hedge against interest rate increases between now and when I buy my house in 6 months?
Thanks in Advance.

John answers:

Great question. Though not used often, many mortgage lenders offer 90 day rate locks. Your best bet to hedge against the likely rise in mortgage rates is to do a rate lock for the maximum 90 days 75 or so days before your home purchase loan must be funded.

The cost will be a tad higher than if you were to lock for the standard 30 days but this gaurds you against the worst case scenario of rates going up significantly as you wait to buy your home.

If rates happen to go lower or remain the same you can simply use a different lender as there’s no charge to lock a rate so switching banks won’t cost you a penny.

Jenny asks…

What fees can you add on a mortgage loan?

I am in the proces of buying a home. I am going to put 1 point to lower the mortgage. Can i include the fees and the points as part of the loan meanning:

If my mortgage is for 100k

I am going to buy 1 point = 1k
Lets say property taxess are 1k
let’s says loan and escrow fees are 2k

can i get the mortgage loan for 104 k so that all those fees are included?

Thanks

John answers:

No, unlike in a refinance, where this is done by using the equity in the home you own, this cannot be done on a purchase transaction, on a conventional loan.

Escrows may be optional depending on how much you are putting down, typically at least 10%. If you waive escrows you may need to pay a fee for doing so, typically no more than 0.25% of your loan amount.

Also, you will have to pay your homeowners ins policy for one full year at closing.

The other option is to find a lender that offers no closing cost loans, for instance Bank Of America’s “No fee mortgage plus” loan, where they absorb some fees, but charge a slightly higher rate for doing so.

Note that you may still have some costs associated with the loan even though it’s called a no closing cost loan.

Hope this helps, and good luck.

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