what's the reality.....

[Brenda]

Originally Posted by TheWife

I know people that are offering $40K below asking and the sellers are taking the deals, when last year they would have laughed at them and said no way.

I have a neighbor to the left of me that has been trying to sell his house for over 2 yrs and just accepted an offer 100K less than asking! The neighbors are beyong livid with him but I can kind of understand why he did it. He had just finished building his retirement nest and couldn't handle 2 houses.

[TheWife]

We found out that credit scores don't have a huge bearing on the rate you get

Hmm, maybe that varies by area?? I can tell you here they certainly do! Around here, if you aren't over 740, you aren't going to get a very good interest rate. Anything over 740 is all about the same though, maybe that's what you meant? Like you don't get a better rate at 780 than you do at 740, it's just being over 740 that gets you the best rate. Of course your down payment, equity, debt-to-income ratio and the amount of loan docs you do also affect the rate.

[Mistress Trista]

Your credit score absolutely affects your interest rate. The lower the score, the higher the rate. At some point, and I'm not sure what that is now with the credit crunch, if your score is too low, you can't get a loan at all.

[quapamom]

Originally Posted by Brenda

I have a neighbor to the left of me that has been trying to sell his house for over 2 yrs and just accepted an offer 100K less than asking! The neighbors are beyong livid with him but I can kind of understand why he did it. He had just finished building his retirement nest and couldn't handle 2 houses.

Yikes! $100K is a lot! We ended up selling our WA house for $45K less than our original asking price. Of course they say that the right asking price is what people will pay for your house, not what you want out of it. So apparently that was the right price for us. We were thankful to get it done.

On the flip side, we offered $45K less than what the builders were selling our new house for and they accepted it. Amazing! Now, that's not to say that sealing the deal with a lender was a walk in the park. It was a nightmare actually with terms changing all the way up to closing. I don't think they knew what their own rules were at that point. Don't want to go through that again anytime soon.

[Amanda]

Originally Posted by TheWife

Hmm, maybe that varies by area?? I can tell you here they certainly do! Around here, if you aren't over 740, you aren't going to get a very good interest rate. Anything over 740 is all about the same though, maybe that's what you meant? Like you don't get a better rate at 780 than you do at 740, it's just being over 740 that gets you the best rate. Of course your down payment, equity, debt-to-income ratio and the amount of loan docs you do also affect the rate.

Not sure Michelle- Nick and I have the huge aviation loan to pay but as far as credit card debt, we have about $500 combined and we own our cars and like I said excellent credit. Our mortgage guy (who is a friend of a friend) said we couldn't get a lower mortgage rate. Nick was dumbfounded and asked him several times about this. We worked so hard for our credit scores to get a 6.75%?! That sucks!

[TheWife]

Ok, you're original post I understood as you were saying that your credit score doesn't really get you a better interest rate, and I'd have to say that's generally not the case, other than once it's over 740 it doesn't really matter how much over 740, just that it's over. (So an 800 score wouldn't be a better rate than a 741, but a 741 is a much better rate than a 739).

What you are describing now though sounds like one of two things, either the one mortgage person you spoke to just didn't have access to better rates or was holding out on you, or the rates in your area aren't as good as the rates in other areas. Whenever we apply for a mortgage, we always request a GFE from about 10-15 companies. They vary greatly! At first the best offer we got this last time, was at 7.5% and $100 for MIP, (this was 2 years ago, and on a no-doc loan with no down payment). After looking around more, we ended up with a loan for 7.375 w/ no MIP. So we saved a ton of money from the original "best rate". So it's possible that the one guy you spoke to just doesn't have the best rate to offer.

When you combine your aviation loan and credit card debt and all other payments, and you add in what your potential mortgage payment would be, they're going to want to see the total debt-income ratio to be around 30% or less for the very best rate. So if your loan payment would be $200 a month, and the mortgage you want is $800 a month, they're going to want you to make $3000 a month, and if you don't, that could also affect the interest rate they're willing to give you. If you are trying to do a no-doc loan or less docs, that would also affect it.

[Amanda]

We REALLY need to make some calls to other mortgage companies.
I have to say I feel somewhat pressured to use him because of the mutual friend... but oh well. It's about the mortgage rate and the amount we can afford to pay each month!

[TheWife]

I agree! You are the one making the payment for as long as you own it, your mutual friend won't be, so do what is in the best interest of you, not them! It's one thing if Choice A and Choice B are the same price, but you are friends w/ Choice A so you give him your business. It's another things altogether if Choice A can't get you the best rate! And be sure to compare closing costs as well, those can vary by about $1000 or more!

[roz]

Great idea Amanda! And don't forget some of the local banks like Beneficial that specialize in this. I got a 5% rate from them when we bought our NC property. Also check out ALPA FCU--I don't know if they do home loans. We got a great car loan through them.

[lucky81698]

Amanda,

We have our mortgage through the Delta Community Credit Union (formerly Delta Employee Credit Union). We got a good rate, and they did not require mortgage insurance when we had less than 20% down, and did not require escrow for taxes. I don't know what their rates are now (as far as I know, you can join if you are sponsored by a member ) or if the CAL credit union may have something???

Jan