First home buyer help, please analyze.

[Dasanii19]

Will we get to go to the house when the appraiser/inspector is there? Will we get a copy of the appraisals and inspections? If the house does come back appraised lower than what we are paying, will the agreement be null and void?

Also, our lender said she would pay for our appraisal fee...is that her way of stacking on different fee's so we are really paying for it, or will she really be paying for it?

When is the actual government bailout going to happen? Do you think we should lock rates now? or should we even be worried about that?

In your opinion, with a loan for 160k, using a FHA 30 yr fixed loan, what rate should we expect to get from our lender?

[admin]

Will we get to go to the house when the appraiser/inspector is there?

You are allowed an should be encouraged to be at the home during the inspection. I believe it is important to be at the home for the inspection but remember to not talk to the inspector much during the inspection so that you do not distract him. If he seems to feel he has to constantly hold a conversation with him tell him that it is ok that he does not chat with you during the inspection because you do not want him to miss anything.

It is not normal for the buyer or the seller to be present when the appraiser is at the property this is the because parties to the contract should not be influencing the appraiser. It is very important to our financial system that the appraiser make an unbiased opinion of value. Appraiser's being influenced is one of the reasons that we are in the financial termoil we are in.

Will we get a copy of the appraisals and inspections?

You should absolutely get a copy of both the inspection report and the appraisal.

If the house does come back appraised lower than what we are paying, will the agreement be null and void?

This depends on the verbage found in the purchase and sale contract. Any good agent makes sure that there exists a provision that gives the buyer the option to exit the contract if the home does not appraise. If the home does not appraise then you will have to option to walk away, renegotiate the price with the seller, or if the seller will not renegotiate the price you can pay the difference between the purchase price and the appraised price to see the contract to close.

Also, our lender said she would pay for our appraisal fee...is that her way of stacking on different fee's so we are really paying for it, or will she really be paying for it?

This depends just watch the HUD 1 statement at closing and make sure it does not include a fee for the appraisal. It is normally the case that the appraisier is paid by the buyer

When is the actual government bailout going to happen?

Nobody can answer this for sure but it should be soon. The House or Representiives will be voting on it tomorrow. Then the U.S. Senate will vote on it not long after. Once it has passed both the House and the Senate the President will sign it into action. Bush will sign it right away so it all depends on how fast it gets through the House and Senate.

Do you think we should lock rates now?

This is a tough call and should be based on your expected closing date. Give me a little more information and I will give you scenarios to look at so that you are best prepared on your decision to lock.

or should we even be worried about that?

You should be on top of it but it shouldn't be a major worry for you. I think we will likely see a small drop in rates when the bill is passed but this could be as much as a month out.

In

your opinion, with a loan for 160k, using a FHA 30 yr fixed loan, what rate should we expect to get from our lender?

This all depends on credit score, length of credit history, time on your jobs and whether or not you have any derogatory credit. So, it is difficult for me to give you any kind of answer. I can give you last weeks averages but they may not be relevent to what will happen next week.

[Dasanii19]

In regards to the closing date, we are due to close on November 15th. Im not sure what other details you may need in regards to that...

A couple more quick questions popped into our heads...

Is the loan signing process, another negotiation process? If we dont like what we see, (i.e. extra fees) do we negotiate it out, or simply walk away?

Do you know what are true legitimate lender fees? Im still a bit confused on what fee's should be there, and how much they should be marked up?

Again, thanks so much for your patience with us! haha...

[admin]

[quote=Dasanii19;697]In regards to the closing date, we are due to close on November 15th. Im not sure what other details you may need in regards to that...

A couple more quick questions popped into our heads...

Is the loan signing process, another negotiation process?

No, this is a formal event of completing all transaction associated paper work. But, there should not be any changes on what you have previously agreed to. One way to protect yourself on these issues is to get a copy of the HUD 1 (It spells out all charges fees and final rates) at least 24 hours before you go to the closing table.

If we dont like what we see, (i.e. extra fees) do we negotiate it out, or simply walk away?

You are stuck walking away or demanding that the loan officer fix the improper changes from the previously agreed upon rates and fees. Then rescheduling the closing appointment.

Do you know what are true legitimate lender fees? Im still a bit confused on what fee's should be there, and how much they should be marked up?

On a typical FHA loan you will see the following fees.

Origination fee - This is a few that is charged to pay the loan officer for his work and it should not exceed 1% of the loan amount.

Administration Fee - This fee is usually around $250 bucks and a cost incurred when you obtain an FHA loan.

Appraisal Fee - Normally around $325 although it can be higher in more expensive areas of the country.

Credit Report - Not to exceed $65 or you are getting taken for a ride.

Processing Fee - This fee is not charged by all lending institutions but you will see it with most and should not exceed $350.

Underwriting Fee - I think this is a junk fee but you will be stuck paying it unless you are working with a community bank and they do not always have the best interest rates. The fee is usually around $325 but should not exceed $600.

Document Prep Fee - This fee runs between $100 and $175 but if you are quoted higher than $200 they are trying to milk your check book.

Flood Certificate - This assure whether the property is in a flood plain and runs about $20.

PMI Premium - This fee varies depending on lender and is charged anytime a buyer puts down less than 20%. On conventional loans this fee is 0.5% a year but on FHA loans it also has a upfront fee of 1.5% that can be wrapped into the loan.

Mortgagee's Title Insurance Policy - This is not a lender fee but it is a fee required of you to pay to the Title company. A lender will not give a loan unless you pay this fee. The amount depends on state and what title company you use. Stewart Title usually has the lowest fees and here in Houston the Stewart's fee is $100.

Escrow Fee - This fee is normally split between the buyer and seller and runs around $400-$600. Do not pay more than $350 out of your pocket.

Recording Fees - $116 and are charged by the county for recording you as the new owner of the home.

Maintenance/HOA Transfer Fee - This fee is charged by HOAs for transfering the billing paper work into your name and it is only charged if your home has a HOA. The common number in the Houston area is $100 but it depends on the HOA.

Survey - This fee is usually $350 and is a requirement in the state of Texas but can be avoided if the Seller has a old survey available.



Again, thanks so much for your patience with us! haha

[admin]

I almost forgot you will see prepaids also and these are not really fees but escrow holding funds. You will see prepaid interest, homeowners insurance, property taxes and HOA fees if your new home is located in a HOA.

[Dasanii19]

SO far, this is what we have verbally agreed on,

appraisal fee - paid by lender
credit report- paid by lender
HOA transfer fee - paid by seller (that was in our offer letter which they accepted)

Fire insurance I believe was wrapped into the final monthly mortgage payment

Lock fee? I heard it varies depending on how long you want to lock the rate for?

[admin]

Originally Posted by Dasanii19

SO far, this is what we have verbally agreed on,

appraisal fee - paid by lender
credit report- paid by lender
HOA transfer fee - paid by seller (that was in our offer letter which they accepted)

Fire insurance I believe was wrapped into the final monthly mortgage payment.

Yes, this is the case a escrow account will be set up and your taxes and homeowners insurance will be held and paid from this account. The amounts to be held in this account will be added to the principal and interest payment you will make each month. At the end of every year any excesses will be refunded to you. You will have to place at least three months of insurance and 6 months of taxes into this account at the begining of the loan.

Lock fee? I heard it varies depending on how long you want to lock the rate for?

It does vary on the length of your lock period. The norm is for it to be free for a period less than 30 days. Then it varies on how long the lock is for and what lender you are dealing with. If I was in your shoes I would lock at 5.5% because I do not feel that rates will get much lower than this for you. Remember that you can buy points if you have any of the seller contributions left. For each 1% of the loan amount you can reduce your interest rate by .25%. If you plan to live in the home for less than 5 years negotiate that your loan officer get paid on the back end and recieve no origination fee. If you plan to stay in the home for more than 5 years then make sure that the loan officer is making nothing on the back and that your loan is at the par rate.

Again I would float the rate until the 30 day free lock period unless the par rate gets down to 5.5% then lock. The amount the rates will likely decline below this will be negligible in your payment.

[Dasanii19]

Awesome, alot of stuff to take in here but I think im catching on.

Yea that was one of my next questions. So your saying if the closing costs are below what the bank agreed to pay (3%), that I could use the extra towards my rate?

So if the house is 157,000 and I put a 3.5% down, my loan would actually be for 151,505 correct? So it would be 1% of 151,505 instead of 157,000 correct? So the math would be something like this:151,505 X 1%= 1515.05. So every 1515.05 would knock .25% off the rate? Correct?

Yes, 5.5% is what im really trying to shoot for. If I cant get that, I hope I can get something below 6%.. How long do I have to lock in a rate?

Next question is: From what ive read, I have 10 days to get an inspection done on the house. When does the 10 days start?

[admin]

[quote=Dasanii19;702]Awesome, alot of stuff to take in here but I think im catching on.

Yea that was one of my next questions. So your saying if the closing costs are below what the bank agreed to pay (3%), that I could use the extra towards my rate?

That is correct.

So if the house is 157,000 and I put a 3.5% down, my loan would actually be for 151,505 correct? So it would be 1% of 151,505 instead of 157,000 correct? So the math would be something like this:151,505 X 1%= 1515.05. So every 1515.05 would knock .25% off the rate? Correct?

You are following me very well and once again I can say you are correct.

Yes, 5.5% is what im really trying to shoot for. If I cant get that, I hope I can get something below 6%.. How long do I have to lock in a rate?

You can wait until upto one week before the closing date and be fine. Just remember when you do not lock you are gambling. I would say that it is a good gamble right now but you never know what can happen in the markets.

Next question is: From what ive read, I have 10 days to get an inspection done on the house. When does the 10 days start?

The ten days starts as soon as all parties have signed the and initialed the offer.

[Dasanii19]

Originally Posted by admin

If you plan to live in the home for less than 5 years negotiate that your loan officer get paid on the back end and recieve no origination fee. If you plan to stay in the home for more than 5 years then make sure that the loan officer is making nothing on the back and that your loan is at the par rate.

Again I would float the rate until the 30 day free lock period unless the par rate gets down to 5.5% then lock. The amount the rates will likely decline below this will be negligible in your payment.

Can you go into more detail about these two statments above. Id really like to take your advice but would like to understand it a bit better.

Thanks for all the help!!