When you are looking for a mortgage its always a good practice to shop a couple lenders. Just like any other business banks are in business to make money. You would be surprised what some lenders will try to get away with in fees to make extra money. Typically the two fees that are really negotiable are the rates and the origination fee.

A loan officer can make anywhere between 1% to 5% on the loan amount. These fees will include origination and yield spread on the rate that is being offered. Yields spread is commission that is paid by the funder for the rate being sold to the consumer. Typically a good deal is paying no more than 1% on the rate to the banker.

Here are the typical lender fees….. Keep in mind the processing and admin fee are negotiable as well.

1. Admin or undwriting fee usually between $500 – $900

2. Processing free usually between $100 – $600

3. Credit Report fee $20

4. Appraisal free $400

5. Tax Cert $19.00

6. Flood Cert $19.00

After talking to a couple of lenders make sure  you get a initials fee worksheet that itemizes the fees and also get the(TIL) Truth-in-Lending statement. The TIL will disclose APR which will determine your true total cost of fees involved with the loan.

Another suggestion is to stay away from big banks. They typically have more red tape to get loans done, and high turnover……..

Good luck

Mike Clover

www.mikeclover.com

Currently rates are extremely low due the Fed moving part of their portfolio to long-term treasury securities. This move is also known as “The Twist” a tactic that was used by the feds in the 60’s to spur lower rates on money borrowed.  Rates were already extremely low, but this move caused rates last Thursday to drop to 3.75% on 30yr Conventional instant loans. The rates as of 9/28/11 increased back to 4.0% in spite of the move by the feds. With rates as low as they are makes affording a home very possible. This is especially the case when rental rates across the country are extremely high currently. The demand for rentals out weigh the supply currently which ultimately drives up rental costs and favors landlords.

I lived in a apartment and rental home when I was in my early 20’s. I am now 38 and cannot imagine having to pay some else s mortgage. I currently have 3 kids, mother-in-law, and my wife living in our home that we bought in 2005. My wife and I have been home owners since we were 26. Obviously most would agree that they would rather own than rent.

If you have at least a 640 credit score and 3.5% down payment, you can get a home in today’s market as long as you qualify. Its not as hard as the media portrays. The main difference now compared to a few years back is you need down payment unless you qualify for a USDA loan or a VA loan which both loans are 100% financing.

Nether less its a piece of mind owning your own home. Its the dream of all Americans. Don’t let the current negative media prevent you from taking advantage of these low rates and having your stake in the American Dream of home ownership.

If you are buying in Texas, apply with us @ www.mikeclover.com.