Chances are the broker is not being completely honest with you. He quoted you an initial rate of 8.5 and if he a good enough he will do what he can to get you that rate. Brokers tend to overstate the loan interest rate initially to make money on the ';back end'; of the transaction know as points or Yield Spread Premium. This is money they get from the lender to sell you the higher rate rather than giving you the lowest rate possible. Ask your broker if this is the case. If so explain that you are looking for the lowest rate possible and his job is to get that for you.
It sounds like a difficult situation in generally and if he was able to get you a loan in the first place it seems he did his job. Paying $3000 in fees is quite reasonable as I would charge you maximum Federal allowable fees if I knew that the situation is as hard as yours. People that are not in the lending industry tend to think that their broker just collects paperwork from you and sends it in to the lender. There is actually a long drawn out process to get things approved by lenders and with a situation like yours it tends to be more work as there are more conditions from the lender and you don't always get approved with the first lender your file gets sent to and could take many hours processing the loan.Getting a new home but having some problems with mortgage?
That your Broker got you any preapproval with an open judgment is a miracle and a rate not in the double digits is a gift. Ask your broker why you can't go with the lender that gave you the first preapproval. Chances are the preapproval wasn't from an actual lender which is why they're offering you the current options. They are from real lenders. If this is the case you're safer to err on the side of what you can afford so if those rates put your payment out of reach rethink purchasing now and concentrate on the credit issues. Fix them (pay off the judgment and let more time go by from your bankruptcy discharge) and you'll probrobly get a much better rate. The brokers probrobly not lying to you but his fee is most likely tied to the type of loan you get. Usually the more you borrow the higher their fee. So put yourself in their position: If I'm going to get paid more if you borrow more am I going to offer you the loan where you borrow less? Closing costs are the fees and costs associated with obtaining mortgage financing. They include bank fees, broker fee, Bank Atty, title fees, Prepaids and fees levied by your state gov. It is customary that the borrower cover these fees at closing. Please see a housing counselor for homebuyer education.
For what it's worth, I don't think your broker is lying to you. That sounds about right. Its difficult to get a lender to look the other way regarding an unpaid judgement of $10K. He may have made the mistake of thinking it wouldn't be a problem. Unfortunately, there proably isn't a good way to get your payment down. You could pay more in closing costs to buy down your rate, but you'll of course need more than the $3,000 you expected. You may need to start looking at less expensive houses or take some time to work on your credit and get rid of some monthly payments that you have now.
It's not as easy as the first person said... You can shop around, but your doing yourself more harm than good. As a broker I never give an exact rate until I find out what the lenders conditions are. If you would like me to look at this for you I'd be glad to. Email me your FICO score, income etc.... He may have spoken to you too soon or he is trying to make more money.... Ask him what his Yield Spread Premium is...this is the rebate that he is making from the lender. If it's substantial...then he has some room to work with you and he has to disclose that information to you....
Well you always can go to another mortgage lender and tell them what this one said and ask if they can get you anything better with your credit history. Then you can find out if he is screwing you around or not. You don't necesarily have to pay the closing cost. You can see if the buyer will pay for them. That's what I did. And really in 2 years you will probably want to re-fi because your credit will have improved and you will have 2 yrs worth of mortgage payments to improve your credit score. Of course you can then get a better intrest rate. Also look into intrest only loans and 40 year loan (as long as they are fixed for the first few years). You can get a lower payment right now and they you would have to refi whenever your mortgage goes to varible rate. Hope that helps. I just went through all of this and it is soo confusing.
Shop around. Tell your broker that you are looking for a loan with no out of pocket money. If he wants to make $ he will find what you are looking for.
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