Question about Mortgage Fees

Thanks Janet. Actually I had my cousin the loan officer check my credit score and he said it was excellent but unfortunately my FI's is very low. Now I'm thinking we wouldn't get approved by a co-op board. Uggh how stressful!

Sorry Janet I didn't meant to highjack your mortgage fee thread.

Along those lines Glenda... I also have great credit, and my fiance does not. Once we're married, does his low credit score affect my high score? Or could I still get a mortgage on my own without him bringing me down?

I missed all the new posts here...

We actually lend on co-ops in CA...there aren't many here, but a few. All co-ops don't require 20% down. It depends on the co-op's rules. I know that our lender in So Cal will lend up to 95% as long as the co-op will allow it. And co-ops do require board approval.

Regarding credit scores, typically if you are applying for a mortgage with your husband or SO, the credit score that will be used for qualifying purposes will be the credit score of the primary wage earner...so, whoever earns more $$ is the person's credit score that will be used. Sometimes however, the lender will use the lower of the two persons scores. There are 3 credit bureaus and the operating score is the middle of the three scores for each borrower.

Will your credit go down when you marry someone with poor credit? No. But, if start opening joint accounts and don't make your payments on time or run up the balances to a high percent of the credit line, your score will suffer. On the other hand, if you open joint accounts and manage them responsibily over time the lower persons credit score will come up.

Points = Origination fees. Basically the way it works is that loan officers work off of a rate sheet grid. There is a base interest rate at a price (price = points) for example a rate of 6.5% might have a price of one point for a 30 day lock. But, you could also get a rate of 6.75% at a price of zero points. One point = 1% of the loan amount.

So if you were to have a loan of $300,000, one point is $3,000. The payment assuming a 30 year fixed mortgage would be $1896.20 with an interest rate of 6.5%.

On the other hand if you have a loan amount of $300,000 and pay zero points, your interest rate on the same loan would be 6.75% and the payment would be $1945.79.

With these two examples you could figure out if it makes sense for you to pay a point. For example the difference in the monthly payments is $49.59. So, if you pay a point up front ($3000), it will take approx. 5 years to re-coup the cost of the point (3000/49.59 = 60 months).

Also keep in mind that when you are quoted interest rates, the loan officer has to take certain things into consideration that can affect your interst rate, such as your down payment amount, your credit score, what time of property you are buying, if it will be owner occupied etc, the size of the loan.

One last note on having your credit checked. You don't want to have a lot of different people pulling your credit. Inquiries can start to hurt your credit score. However, it is okay to have your credit report pulled multiple times within a 14 day window as long as the inquiries are all the same type, ie. mortgage inquires. If you do two inquires more than 14 days apart it will count as 2 inquiries on your credit report and start to affect your credit score.

I hope I was helpful and not confusing....let me know if i can answer any questions!

And, happy home hunting Janet and Glenda!!

Hi! I am in real estate in PA. You have gotten a lot of great advice here - the best thing i would tell you is to talk to an educated, experienced real estate agent who has had at least 50 settlements. Since title and mortgage issues differ from state to state, you will be best served by getting advice from someone who conducted most of their transactions in your state - that way they understand which fees are common in your area and which are total BS!

Good Luck and if you want any more info PM me

Jess and Mrs. B - thanks for the advice. It really is helpful!!! We are looking at 7 houses tomorrow so it's all starting to feel quite real.

your welcome! ask the real estate agent to go over a 'mock' HUD (settlement statement that goes over all of the costs) or one from his/her last settlement or a similar transaction to the one you will do. GOOD LUCK!

Great advice Mrs. B!

Good luck Janet! We'll be excited to hear when you find the home of your dreams!!

Janet - the other thing you really need to do before you go any further is to meet with a CPA BEFORE you go through this process.

Jessalyn is spot on with her info re: points. However, you need to know exactly what will impact you in your situation. Also, you need to decide if you will file separate or joint and how you will handle who gets what deductions if you chose to file separate. Keep in mind that AMT can really cause some interesting problems relative to deductions and you might not be subject to AMT today, but it can be easy for one of you to trigger it and you should be prepared for the topic as you are likely to own this home for awhile.

One thing to note about state and local property taxes, you may be able to deduct them from your state taxes, but I believe that you are no longer able to deduct them from your Federal taxes.

Thanks, Natasha. Ahhhh it gets quite complicated, doesn't it! My hubby spent the first half of this year as an ind. contractor and I am thinking about taking a job for the rest of the year as one, so our taxes are already going to be crazy complicated, plus buying a house, and because we might buy in MD or VA factor in a state change and suddenly I just want to quit and move to Mexico and live in a grass hut!!!!!!!!!!

But really, I do appreciate all the advice. Now if you could just make my dream home cost half as much...