Help with Jumbo

grantTN · Joined: 24 Nov 2006 Posts: 1

We are moving to Georgia soon and are looking for a new purchase loan on a new contruction home. The loan amount is $850k. I would like to put down 5%.

Our credit scores are 697 and 681. We have NO judgements, bankruptcies, foreclosures, collections, or tax liens. Our combined annual gross income is $291k with annual bonuses averaging another $30k. We both earn our income from salaries and have been in our current line of work for over five years.

Our monthly credit payments are $2,200 and we have about $175k in investments and reserves.

What type of products will be available (e.g. ARM's, zero interest, etc.)? Will we qualify for prime rates? Can we avoid PMI with the low down payment? Do you recommend a broker or going straight to a lender? Which lenders are the best for our scenario in terms of rates and fees?

chow · Posted: Sat Nov 25, 2006 2:13 am Post subject:

Any time you avoid PMI with less than 20% down you will pay the piper.

:wink:

don't shop till ya drop, Okay? :wink:

direct · Joined: 25 Nov 2006 Posts: 5

Actually thats not true - We work with many lenders who do not require PMI at 95% LTV. The rate difference is .125% which can be excused for prime borrowers who qualify full doc. Based on your scenario, you have two options: a. 95% LTV (1) loan which will have a rate of approx. 6.85% - 7.125% interest only or principle and interest, depending on the fixed term. I suggest a 7 or 10 year fixed which has better pricing than a 5 (amoritized over 30 years) No PMI. b. spliting the purchase into (2) loans, (1) at 80% LTV and the (2) at 15% LTV. The rate on the 1st will be approx. 6.25% - 6.625% and the 2nd will be approx. 8.25% interest only. Both rates will be fixed however the 1st loan can be interest only or principle and interest. This loan will not have PMI as well.

Your best bet is to utilize a broker, depending on the compnay, we have more control over pricing because of rebates and commission that can be utilized from the lender rep to reduce the rate and/or closing costs. Furthermore, all costs are negotiable unlike some direct lenders.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

:roll:

Pardon me while I shed a tear from the immense amount of laughter that just busted through me.

First of all, I nuked your contact information. It is apparant you didn't bother reading the rest of the site, nor did you read the information presented to you when you signed up for the site.

In addition, I loved the 6.875-7.125% rate after you said that it was about .125% difference in rate. I've been on vacation for a week away from the market, but it seems to me that from what I was just looking at you may as well talk some more details before trying to pull that wool over anyones eyes.

Quote: Your best bet is to utilize a broker, depending on the compnay, we have more control over pricing because of rebates and commission that can be utilized from the lender rep to reduce the rate and/or closing costs.

Wow, I'm surprised Chow hasn't jumped on this considering her quick witted nature on this very subject not all that long ago.

Your best bet is to use someone that knows what they are doing and isn't going to screw you over, as well as someone you are *comfortable* with. Sometimes that's a broker, some times it is a bank. There is no cut and dry "it's always best to use so and so".

My favorite line though was this:
Quote: Furthermore, all costs are negotiable unlike some direct lenders.

Costs are always negotiable. The one thing to remember however is that sometimes, you get what you pay for. I don't negotiate my fees unless there is a very good reason to do so. My pricing is always within a certain very narrow range. Since the costs are 3rd party (e.g. appraisal) with very few exceptions, there really is no discussion about that. I do a tad more for my customers than most do however, and definitely more than the guys who are under-cutting themselves, stumbling over their knotted shoes trying to get any old deal to keep them from going hungry.

direct · Joined: 25 Nov 2006 Posts: 5

The .125% referred to the addition for a NO PMI program rather than a non-PMI program. Depending on the ACTUAL scenario and the time of the RATE LOCK the rate could be as high as 7.125%. Based on the market, the rates will not go DOWN from todays available rates.

Unfortunately Wells Fargo does not have the program stated above. I have many friends who work at Wells, in fact, they turn to us for suggestions on proper placement for their clients. We respectfully decline since we have wholesale affiliation with Wells.

Haplo knows very well that he is restricted to the underwritting guidelines and pricing standards of his branch and corporate management. There is almost NO flexability with retail lender pricing and closing costs. However, when you deal with wholesale account executives, they are more than willing to swallow basis points i.e. commission to reduce the rate thereby the closing costs can be adjusted by the broker since the rebate will not be touched. I had to laugh about the costs being "3rd Party"! The costs come from the lender ... underwritting, processing, doc prep and points. Yep, lenders love their points to "stabilize" or "reduce" the rate. Countrywide and Wells call it "discount points" therein hiding the fee. We typically charge less than 1% and achieve a much lower rate than the bank even with a rebate. Retail loan officers and account managers need to close much higher volume and achieve greater monthly and quarterly funding figures to make even a moderate percentage of what loan officers with a high split who work for a broker do.

I eagerly await your response. Keep in mind ... I'm VERY familiar with Wells.

Again, the bottom line, the program can be done with NO PMI and still maintain a great rate. You "nuking" my info (must be a Bush or Kim Jon Il supporter) simply hurts the potential borrower from shopping and getting all the info.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: Haplo knows very well that he is restricted to the underwritting guidelines and pricing standards of his branch and corporate management. There is almost NO flexability with retail lender pricing and closing costs.

Haplo knows the costs of running a business, and realizes that one must make money in order to be a successful business. Haplo also realizes that he has had no problem doing such in a market that has many companies floundering and trying to figure out where to get their next deal.

I can assure you that if you believe there to be no flexibility in pricing or costs, then you are working with people who have not proven the ability to keep a business sense about them, and are only concerned with lining their pockets with gold (a very common problem in the lending industry.)

Perhaps you misunderstood what 3rd party costs are. Those would be Title Insurance, Escrow, Taxes, Appraisal, credit report, recording fees, tax stamps, etc. It is *quote* obvious that you only work with the wholesale side of business, because you have absolutely no idea what happens on the retail portion of the company.

You are not so familiar with Wells as you think, and your attempt at political humor only further shows that you have a blatant disregard for the rules and guidelines of this forum, as well as the policy that you not only agreed to by registering, you also received in a private message from me.

Your information is not allowed because this is not a sales forum. You are brand new to this forum, and since your first post you have shown that you have absolutely no desire outside of picking up a few customers. You made a rather large mistake by trying to shove people away from what you do, on a forum where most of the moderation have been in business most likely as long as you've been able to walk and talk.

So, you can suck up your pride and try being an active participant, or you can go visit another board where they don't care where people go and what they do and join the list of hungry brokers trying to get by.

direct · Joined: 25 Nov 2006 Posts: 5

Haplo doesnt run a business, he is a cog in a very large corporate wheel that keeps a very tight leash on its employees and how they conduct business to feed the fatcats their desired milk.

Fortunately as a broker, we do not need to focus on any specific market. Wells can only conduct business with a very small pool of individuals that quaify based on their loan investor / servicing guidelines. That my friends, means retail loan officers need to be concered with each and every transaction. The base is laughable and the commission is painful. When 50% of your clients dont qualify for either income or asset purposes it makes it more difficult to afford pockets, let alone the "gold".

Our income comes from being able to conduct business nationwide in the RESIDENTIAL and COMMERCIAL market including A, Alt-A, subprime and hardmoney clients. Even in a waning market, there is more than enough business for everyone without overcharging. Realtors, doctors, lawyers, CPA's all demand fair and accurate compensation for the successful completion of an insurmountable service. I always say you need 3 things in life ... 1. You'll always get sick and need a doctor 2. You'll always have legal troubles and need a lawyer 3. You'll always need a home therefore you need a great loan officer.

We treat every client with absolute respect and they love the ability to have many, many options coupled with exceptional service. I dont hear of loan officers from Wells spending evening after evening at a clients home discussing loan options, talking about final pricing, picking up documents personally (not because the fax is broken but simply to say hello) or signing the loan in the comfort of their home. Our hours are 7:30AM to Midnight without fail. Do we deserve to make a wonderful living, have nice homes, take vactions and save money for investments. Absolutely, becuase we go the extra mile and deliver the best product at the best price. Thats the difference between worrying about clients or expanding your office space because you need to hire additional support staff to handle the business.

And you're right, you may have more years of experience but its an amazing feeling to have created a wonderful business founded on integrity and innovation before the age of 30.

My post was not about picking up a few clients, its about my unwaverning passion to provide products that meet a clients financial needs. You sent me a private message about falling in love with one specific AE.. come on now, I hope you think I'm smarter and more saavy than that! We not only discuss business with the AE but we make it a point to discuss realistic terms, pricing and guidelines with Account Managers, underwritters and funders. Its a rookie mistake to submit to any lender that dangles the product carrot - Our pricing exceptions and closing costs come from streamlined volume to a handful of exceptional lenders.

I mean no disrespect however I'm hearing a lot of misguided and quite frankly wrong information from "experienced" people. Its not fair to the clients reading this forum and it certainly holds you back from exceeding menial middle-management income.

Dont just be a guy in a tie tryin to get by.. melt that "super banker" action figure down to a post corporate coaster where a mug with your personal logo brightly exclaims your success! With a little humorous marketing, some solid out-of-the-box loan programs and a tad bit of commercial finance knowledge, you will never chase clients again and make the income you dreamed of, without lying to clients or hurting your reputation. Thats called filling your pockets with 1003's not gold :wink:

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

You've accomplished two things since coming here.

1) Breaking the rules on advertisements
2) Piss off a moderator

Check your in-box.

Again.

direct · Joined: 25 Nov 2006 Posts: 5

I accomplished 3 things here:

1. Expressed my ability to present a concerned client with a no PMI program that will not have payment shock or high closing closts.

2. I didnt not mention the name of my company anywhere at anytime! Geez, I dont even have a signature! I simply exclaimed the level of SERVICE which should be standard in this business. Thats not advertisment.

3. You're pissed off because I'm questioning authority. I understand the idea of community however it appears like you are moderating a government run, neo communist, one thought message board. When you "nuke" peoples thoughts you should think of Orwells 1984. Do you delete everyone's posts that dont agree with your opinion or have alternate ideas or basis for service?

You sent me a private message about "defaming" your employer ... they're great on HELOC's and 30 year fixed products for prime borrowers but other than that you'll have to look elsewhere. Unfortunately the vast majority of borrowers nationwide are alt-A with stated doc. That means most borrowers can not be serviced by your bank and thats a shame. Not to mention the freakin fees on your checking and savings accounts!

I'm just trying to open your eyes about additional opportunities.

By the way, whats the rate on a 95%, 660 mid, o/o, i/o, siva, self employed "renovation loan"? Does it have a 1st and 2nd? I think this will prove my point ...

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: 1. Expressed my ability to present a concerned client with a no PMI program that will not have payment shock or high closing closts.

Which did not seem to fit into the exact numbers that you quoted. You said .125% higher, and then quoted a 6.875 to 7.125 rate. Higher than what, exactly?

Quote: 2. I didnt not mention the name of my company anywhere at anytime! Geez, I dont even have a signature! I simply exclaimed the level of SERVICE which should be standard in this business. Thats not advertisment.

Every single post that you had made at the time of my return contained 'i can help you, here's how you contact me.' This is considered an advertisement. Read the rules and regs of the board, or don't post.

Quote: 3. You're pissed off because I'm questioning authority. I understand the idea of community however it appears like you are moderating a government run, neo communist, one thought message board. When you "nuke" peoples thoughts you should think of Orwells 1984. Do you delete everyone's posts that dont agree with your opinion or have alternate ideas or basis for service?

No, the only information deleted was your contact information. Even your incredible ignorance about my company has been left fully intact.

I sent you a private message because arguing on an open forum only makes both parties look like idiots. I gave you a chance to redeem yourself, but you decided it was more important to speak out against that fascist regime.

You should really try and work on your knowledge of other companies before you post. Most of the information you posted as fact was blatantly incorrect.

Also, just so you are aware, we have an Alt-A product. Just because *you* don't have access to it, does not mean it doesn't exist. You obviously have no idea what a 'renovation' loan is, per your quoting of the word and your description of the setup. How is it that if most borrowers can not be serviced by my bank, that we are #1 in the nation in residential lending? #1 in FHA lending? #1 (By a VERY long shot) in Renovation lending? I'm sure there are others, but I'm not interested in going and digging up Wells's numbers on every single product.

Know how close #2 is? $50 billion behind. Wow, that's crazy. We're over 33% higher than the next closest competition. Oh, and coincidentally, that competition has been closing up shop left and right. At least, in my part of the country.

For your information though, I don't know off the top of my head the exact scenario you posted because I just got back from vacation. A real vacation. The kind where you leave work at home.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

This post is being locked.

If you want to discuss the possibilities Wells Fargo has to offer the masses, create a new thread about it. If you want to continue to blast the leadership, by all means, do it in another section of the board.

chow · Posted: Sun Nov 26, 2006 11:33 pm Post subject:

Well, I am Unlocking it, because:

#1. I can
#2. This site isn't all about "Wells Fargone."
#3. We all have different avenues of finding money. (maybe someone else got a better price? :wink: )
#4. I believe in fair commerce and trade.
#5. Opinions are supposed to be just that. Opinions.

You can't lock someone else out just because they have a different OPINION.

This is supposed to be a discussion board. And How dare you all get in a hissin' match on my birthday!

m2c · Joined: 03 Aug 2005 Posts: 937

Wow, did you stir up a hornets nest! … But you do deserve answers.

As you probably recognize, your FICOs are “average” – but “average” wins and you should get the more or most attractive interest rates. Your debt structure is a bit unusual in that you’ve avoid car debt and, I assume, taken on credit card debt instead – negative FICO effect unless you’re indicating what you run up monthly on charge card versus solidifying in credit card debt; lender consider only minimum monthly payment on balance even if you pay it each month. What you will NOT get is any discounts on mortgage insurance. I’m not necessarily a fan of “piggyback” loans but at these loan amount, you’re talking “real money” for mortgage insurance. I’d definitely look at a 80-15 or 75-20 for comparison. The “no MI” is often a sales pitch and there is MI lurking in the background under the guise of an increased not rate. Remember, a bump in interest rate lasts “forever”; MI last around 137 months at today’s interest rate levels and is reduced at the 120-month mark in any case.

From information given, I would not anticipate any issues qualifying. I assume this is NOT a construction loan but a purchase of a newly constructed home. If the former, there’s another set of admonishments I’d give.

Choice of products – not enough data. Have not heard of a “zero rate” mortgages but there’s a new con job created every minute. Personally I don’t feel there’s enough spread on the hybrid IOs right now to justify the choice unless you’re desperate for the lower monthly payment (piper will have to be paid eventually) or you want auto-recast, e.g. application of bonuses as curtailments.

Banker or broker? I favor brokers – not just bias speaking. Many times bankers are less skilled BUT when you venture into jumbo land, you may be able to take advantage of the “stupidity” of LOCAL commercial or savings banks to work to your advantage. They occasionally “buy the market” when some hot shot sells “pairing” CDs to mortgages. Ugh, this isolated “cost of capital” is what I think sent L&N to bankruptcy but I assume you’re more interesting in your own well being than the bank’s. If a bank is ever going to have an advantage over a broker, it’s in the jumbo area.

You did not mention any proceeds from a home you might be selling in the departure location. This could play a big part in the broker-or-bank decision – counting the debt service on the prior home (either a broker or banker might be able to waive this) or application of proceeds after purchase mortgage (banks have an advantage here – don’t believe a broker on a “free recast” although this is overcome with a piggyback second with no PPP).

chow · Posted: Tue Nov 28, 2006 2:04 pm Post subject:

M2C,

Thank you Sir. 8)

We can't have a discussion about what "Might" be available- without hearing from the choir.

MONEYFORYOU · Joined: 28 Nov 2006 Posts: 5

This shouldnt be such a fuss to get closed...I have a few connections that can get you funded with that score.

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