A lot of people have started to complain about the many problems that they are having with their loan officers at big banks. Most of these people are new at buying a house, and so they don’t know of the many ways in which loan officers try to manipulate them. Often, because of the inexperience of these new buyers, loan officers are able to walk out with a deal which cost a lot more than it should have.
Here’s an example to further explain this: Fannie Mae says that 100% financing for VA loans aren’t suggested. Though they start at a 3% down payment, they must have stricter requirements for private mortgage insurance companies. The minimum FICO is 680 whereas the MI factor, which is used to calculate the private mortgage insurance, is quite high.
On the other hand, FHA has a 3.5% down payment and you will be giving HUD 1.75% upfront mortgage insurance premium, an amount you won’t be able the get back. Also, the MI factor is the highest of all loans, which is 1.35% of the total loan. If the total loan were to be $300k, the MI factor will be 300k X 1.35% which amounts to $337.50 a month. Now this is extremely expensive, but a lot of bankers will prefer going to FHA first as it helps them make the most money in the business.
Other points that you need to be careful about when buying a house are:
- Remember that closing costs will vary from state to state and that Florida is a fairly expensive state. This is so because Florida has lender costs, title costs and state costs which make a big sum all together. This is obvious when you note that typical lender costs are anywhere between $895-$1,700 depending on the sort of loan and company you go for.
- You should also know that as a buyer, you shouldn’t ever pay for any of pocket expenses other than inspection, appraisal and a Flood zone before closing the deal.
- Keep in mind that applications fees like Chase charges shouldn’t be paid as they remove the accountability of getting the loan done.
- Finally, remember that you should be in the same arena as realtors so that the loan officer doesn’t make any money until the loan closes and funds.
Choice Mortgage Bank has an exemplary A+ rating from the Better Business Bureau. We know how important communication is for you throughout the process so make sure you can always reach us. If you’d like to get the best deal, contact us. We have your best interest at heart.