Loan Shopping Advice for 30yr Fixed Loan

Sam78

Sam78

New member
Hi,

I just wanted to playback some of my research / decisions regarding the loan and wanted to seek advice from the cyber friends.

Background:
Had a student loan 8 years ago with Wells Fargo; paid it out within a year.
No outstanding loan; first home. 790+ credit history.
Saratoga property. Sales price: 816K, down payment: 20%, Loan amount: 653K (Jumbo non-conforming?)

Decision 1:
Interested in 30-yr fixed since we will be in the home surely for the next 15 years, if not longer. Is this a good decision?

Decision 2:
Decided not to buy any points. One offer that was given to me (see below) was to buy 1/8th of a point for $3600. This would reduce my monthly payment by $48 (from 3166 to 3118) and take 75 months to break even. Hence, I decided to not spend any money on points. Is this a good decision?

Decision 3:
Decided to stick to the Jumbo loan since, surprisingly, Jumbo loan rates are lower than the non-Jumbo rates. I can sell some stocks and pay another $28K in down payment (to make a $625K loan), but the rates seem high. Does this make sense?


Loan options:

1. OnQ:
IP's in-house lender is OnQ. They seem to be a broker who work with many lenders. They Pre-Qed me initially.
Offer: 4.125%, 30-year fixed, $1000 closing credit.
Option to buy 1/8th of a point at $3600. He recommends against buying a point.
Pros: Good customer service/advice. Guarantees on-time closure. Picks up penalty if they dont close for any reason (even gas company delay).
Cons: higher rate? Low closing credit? No points from lender?

2. Bank of America
I have various accounts with them for 10+ years. I have been working with an agent in Irvine BoA.
Offer: 4.0%, 30-year fixed, No closing credit. Did not discuss points. She needs to me to show reserves for a year (I can show stocks and 401K/IRA)
Pros: Low rate?
Cons: She doesn't remember me; No guarantee on timely closure. I pay penalty if she doesn't close on time.

3. Prime lending:
A brokerage company referred by my previous RE agent.
I will be reaching out to them today. Will update rates once I have them.

3. Wells Fargo:
Should I look at Wells Fargo? Hear a lot of about them in these forums.
Any contacts or recommendations?

4. Have been in touch with a few online brokerages to find a good rate as well: HomePlus Mortgage, Roundpoint Mortgage, Southwest Direct Mortgage, Quicken Loans, Loan depot, etc. Is it a bad idea to shop so much on the internet. I am careful not to provide the SSN. But, will they get me a better rate? Any reviews or experiences with these comapnies?

Any other suggestion as I try to find to find a lower rate?

Thanks my friends.
 
Get in touch with member soylent green, he is also a site sponsor. Does this stuff for a living. And has made a lot of fellow members on this site with his pricing and service
 
Decision 1:
This is up to you and how much risk you can take. Although you say now you'll be there for 15 years, that might change... in 10. The extreme is ps9 style, refi every year with the lowest ARM you can find.

Decision 2:
I don't like to pay points either. If you can avoid fees without them putting it into the loan, I would do that too.

Decision 3:
If you can afford the higher monthly, you may want to stick with Jumbo. I'm a believer in if you can make the nut, make your loan as high as possible and keep as much of your liquid, investments etc where they are. Money works harder for you at returns greater than your mortgage rate.

Decision qwerchete:
You should contact SGIP, John Wheaton. He'll even refer you to other brokers if he can't help you out. That Soylent Green can on the upper right, click it and it will set you free.

Good luck and keep us updated.
 
irvinehomeowner said:
Decision 1:
This is up to you and how much risk you can take. Although you say now you'll be there for 15 years, that might change... in 10. The extreme is ps9 style, refi every year with the lowest ARM you can find.
Click to expand...

thanks for the reminder, that time again, just checked zillow, 5/1 ARM at 2.5% with almost no cost and 30 yr at 3.875% with no cost.  these are jumbo, 55% LTV, FICO 760+, no cash out, primary residence.  lender is Aurora, gonna contact them now
 
Sam, since you got a lower quote from BoA, why don't you ask OnQ to match the quote if you like them better, and with the benefit of closing guarantee? I think it's definitely worth the $1000 credit for the 1/8 rate reduction (vs buying point for $3600).

I did contact SGIP recently to get a quote from him, and he's working with BoA as well. He did quote me 1/8 lower than OnQ with some credit, so it might be worth to ask him again anyway.

For Wells Fargo I did get a better quote for 7/1 ARM at one point with more credit than OnQ if you would consider that option, the quote I got for 30yr fix was the same as OnQ around 2 weeks ago.

Wish you good luck! And looks like we will be neighbors soon :)
 
You are already getting good advice.  I would just add on.

I would avoid the ARM if you know you are going to be there long term.  It is very very unlikely that interest rates will be lower than 4% 5-7 years from now and since it's your primary residence, no reason to risk it.  4% is already insanely low, I would lock it in and forget it. 

OnQ is great when you start but terrible thereafter.  The top guy is fine but the people who do the paperwork are not responsive and often overworked (probably connected).  I almost lost my house because they didn't tell me the maximum loan amount I could take out and resulted me in having to scramble for more money for down payment weeks before closing.  If I had do it again, I would definitely not go with OnQ.

As for the ontime closing thing, there is some discussion about where TIC actually holds you to that.  I would say that most responsible lenders will get you funding on time.  Your loan doesn't seem complicated at all.
 
For a jumbo, brokers typically aren't going to be much help unless you have something very unusual in your finances. No need to spend time on online quotes either.

Large majority of jumbos are underwritten by wells, boa, chase and citi. often, they keep the loan on their own books and don't resell them. i would just take the time to talk with a loan officer at each of those banks directly and you probably don't need anything more than that.

people mentioned getting 4.0% even around a month ago. i think you may be able to get high 3% now, but not sure. All 4 are going to be very competitive and close to each other. but my understanding is in jumbo market, who is best can truly change week to week or month to month so you just have to ask.
 
Pluto3D said:
For a jumbo, brokers typically aren't going to be much help unless you have something very unusual in your finances. No need to spend time on online quotes either.

Large majority of jumbos are underwritten by wells, boa, chase and citi. often, they keep the loan on their own books and don't resell them. i would just take the time to talk with a loan officer at each of those banks directly and you probably don't need anything more than that.

people mentioned getting 4.0% even around a month ago. i think you may be able to get high 3% now, but not sure. All 4 are going to be very competitive and close to each other. but my understanding is in jumbo market, who is best can truly change week to week or month to month so you just have to ask.
Click to expand...
That is true, the rates on jumbo loans will depend on the appetite of the lender since they are going to be holding onto it as a portfolio loan.  Best to call around the bigger banks and see which banks wants to fill up their jumbo loan portfolio.
 
Irvinecommuter said:
OnQ is great when you start but terrible thereafter  ... I almost lost my house ...  If I had do it again, I would definitely not go with OnQ.
Click to expand...

I had a similar experience with OnQ.
 
zovall said:
Irvinecommuter said:
OnQ is great when you start but terrible thereafter  ... I almost lost my house ...  If I had do it again, I would definitely not go with OnQ.
Click to expand...

I had a similar experience with OnQ.
Click to expand...
So you almost lost your house?
 
Sam78 said:
Quick update: SGIP Rocks! He Wins!!  ;D
Click to expand...

I wanted to follow-up and provide an update. Good new first.

We closed our Escrow, with none other than SGIP. Thanks everyone for the advise. You could not go wrong with SGIP. He had me locked down at 3.875% 30yr fixed with 20% down. He got us around $2400 in credit and $400 in discount.

I was getting nervous as we got closer to the escrow date, but SGIP had it all covered. He was calling the Sales office every now and then and provided them with a transparent view of current status and progress. I asked Sales office once a week, if they had any concerns and they used to say, ?No, John has it all covered?.


Lessons learnt:

1. There are three types of lendors - Big banks (Chase, BofA, WellsFargo, Citi), Mortgage brokers (OnQ, Prime lending, etc.) and Internet vendors (HomePlus Mortgage, Roundpoint Mortgage, Southwest Direct Mortgage, Quicken Loans, Loan depot, etc.). Loan amounts on most new Irvine home (assuming 20% down) would start from 650K. The big banks do want this size of a loan amount for themselves (Jumbo). So you may as well skip the internet lendors and any mortgage broker (prime lending, etc.) and go for the big banks. As you can see above, I did work with and gather quotes from many players. I stopped talking to internet vendors and mortgage brokers after I realized this. You can always refinance with one of them in the future, if the rates go down. I continued with OnQ, since they were the preferred lendor for Irvine Pacific and they had the no penalty for not closing on time.

2. Dont start too early. ideal time period below:
3-4 months ago: Identify the local lendors for each of the big banks with good ratings and reviews.
70 days ago: Call them and provide your home loan details.
58 days ago (within the 60 day window): Connect and ask them for a quote.

3. Be clear on your specifications (30-year, 20% down, 0 points, etc.) before you go to these big banks.

4. Ask for a quote from all big banks on the same day, so you can compare. Most of them would quote the same rate. The difference is in the credits and mortgage cost.

5. Be ready to hassle around. In my case, all of them quoted 4.125, except one. Wells Fargo gave me a quote for 3.875, that I took and showed it to OnQ and SGIP (same day) and they both agreed to match the rate!

6. A good trustable lendor agent is very important. I do a lot of analytical comparision, but at the end you do need a good trustable partner. That was SGIP for me and not OnQ. Thus, I decided to go with SGIP, even barring the penalty clause.

Once I finalized with SGIP/BoA, I sent a thank you note to everyone. The Chase lendor came back and provided a quote for 3.75%. Very attractive, but I had given my word already to SGIP. So, I said, thank you but no to Chase.

So, overall very happy with the way this was done. Happy I have a new friend in SGIP.
 
SGIP is site sponsor with icon link on the right side of this forum, in case people didn't realize that  ;)
 
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