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Mortgage question.. Lender Credit..
newnhdad

Posted on 05/06/2011 2:10:57 PM PDT by newnhdad

Have a question about a mortgage item. We are in the process of finalizing mortgages and we have excellent credit (over 800). We currently have two companies vying for our business and each has offered "lenders credit" towards closing costs. It sounds nice but I'm not really sure that at the end of the day, it will lower our mortgage much since our closing costs are all out of pocket. Actually, I'm not really sure what exactly a "lenders credit" is.. Help.


TOPICS: Business/Economy; Chit/Chat; Education; Miscellaneous
KEYWORDS: help; home; house; mortgage
Any definition of what exactly this is and how it will benefit us at the settlement would help us sleep tonight.
1 posted on 05/06/2011 2:10:59 PM PDT by newnhdad
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To: newnhdad

Ask your escrow agent (or title insurance agent)

I don’t know what a lender’s credit is either, but I’m guessing it will be identified on your Settlement Statement somehow. And the Title Company can explain it.


2 posted on 05/06/2011 2:14:24 PM PDT by Responsibility2nd (I'm a Birther - And a Deather)
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To: newnhdad

Think of it as “negative points”. The bank is giving you money to pay off some of the closing costs.

See if they will lower your interest rate if you tell them they can keep the Lender’s Credit.


3 posted on 05/06/2011 2:20:08 PM PDT by So Cal Rocket (Task 1: Accomplished, Task 2: Hold them Accountable!)
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To: newnhdad

Lender credits can be used for such things as closing costs. Keep your money in your pocket. We got a bank to pay $28,000 in costs, saving us that money in one form or another.


4 posted on 05/06/2011 2:21:44 PM PDT by CodeToad (Islam needs to be banned in the US and treated as a criminal enterprise.)
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To: newnhdad

Your loan officer is taking a portion of their fee paid directly to them from the bank and paying some or all of your closing costs with it. This is how no closing cost loans are done.


5 posted on 05/06/2011 2:22:59 PM PDT by bopdowah ("Unlike King Midas, whatever the Gubmint touches sure don't turn to Gold!')
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To: newnhdad
It is just like any credit, your closing costs will be less than anticipated.
6 posted on 05/06/2011 2:30:29 PM PDT by svcw (Non forgiveness is like holding a hot coal thinking the other person will be blistered)
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To: newnhdad

http://www.city-data.com/forum/mortgages/1113520-lenders-credit.html


7 posted on 05/06/2011 2:39:30 PM PDT by Sacajaweau
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To: newnhdad

I don’t think, in this economy, buying a house is the solution.

With hundreds of thousands or millions of homes currently being unoccupied at the moment, squatting is the best move.


8 posted on 05/06/2011 2:48:48 PM PDT by Jonty30
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To: Jonty30

Can you clarify what you mean by “squatting?”


9 posted on 05/06/2011 2:50:49 PM PDT by bushwon ("If you think healthcare is expensive now, wait till it is free"--PJ O'rourke)
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To: bushwon

Free housing.

Just don’t let anybody see you go through the window and keep the lawn mowed.


10 posted on 05/06/2011 2:59:01 PM PDT by Jonty30
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To: Jonty30

Squatting is stealing.


11 posted on 05/06/2011 3:15:26 PM PDT by Katnandu
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To: Katnandu

It’s only theft if somebody owns something. An abandoned home is owned by nobody.


12 posted on 05/06/2011 3:23:51 PM PDT by Jonty30
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To: Jonty30

An abandoned property is owned by the last owner named on the recorded deed at the county courthouse. If that owner doesn’t pay the property taxes, the title eventually is awarded to the county in which the home is located.

The only unowned properties in the USA are those classified as vacancies. That’s a different animal, but was once a lucrative pursuit for those in the know, especially in oil and gas country. Better surveying has done away with that fun.

But you can always squat until you get caught. Even if the owner just went out to dinner.


13 posted on 05/06/2011 3:50:52 PM PDT by SaxxonWoods (Throw away your papers, blow up your TV...and set yourself free.)
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To: SaxxonWoods

That was interesting, thank you.


14 posted on 05/06/2011 4:19:21 PM PDT by Jonty30
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To: svcw

The lender is going to pay some of your closing costs. They are doing it I assume as an inducement for you to deep six the other lender and go with them. As long as both are offering the same interest rate and similar closing costs take the lender credit. I have done it a million times to get the deal. It just meant I didn’t make as much money but at least I got the deal and made something.


15 posted on 05/06/2011 8:57:28 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: So Cal Rocket

we tried that with one firm and I have a message in to the second one. I hope they do because our ultimate goal is to get that monthly down as much as possible.


16 posted on 05/07/2011 2:50:02 PM PDT by newnhdad (The longest of journeys begins with one step.)
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To: CodeToad

we have them both offering amounts that will just about cover closing costs which is nice. I could use that money to get the blinds or a new Weber grill or both. Or, as another poster suggested, just offer it back to secure a lower interest rate.


17 posted on 05/07/2011 2:55:03 PM PDT by newnhdad (The longest of journeys begins with one step.)
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To: newnhdad

That is an option. You can “buy down” the interest rate by usually paying a point (which is 1% of the purchase price) and take 0.25 to 0.5% off the interest rate, depending on the bank, etc.

We got the bank to pay the 1 point fee and took a 4.5% interest rate to 4.25%, which is not half bad.


18 posted on 05/07/2011 2:59:41 PM PDT by CodeToad (Islam needs to be banned in the US and treated as a criminal enterprise.)
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To: newnhdad
They're offering to waive certain fees upfront for closing, or there may be an interest penalty. Have them both quote it two ways, their absolute lowest APR for one, and the deal that they both have offered for another.

If their offer isn't increasing the APR it's a discount and you would want to take advantage.

19 posted on 05/07/2011 3:04:42 PM PDT by RegulatorCountry
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To: Georgia Girl 2

This is my thinking. I’ve been involved with three purchases and the previous two have been pretty easy because my wife has been taking the lead. Now she’s been transferred to a job that has her traveling and unavailable so I’m doing the negotiating.

It’s funny because when I was doing negoiating at my job, I had more than a few million dollar contract deals, it was always easier because it was someone else’s money and I was in the drivers seat. Now, we have “some” of the money and and I feel as if we’re dealing from a position of disadvantage because we can’t really walk, we need someone else’s money.
I’m playing the best two offers against each other and we’ll probably walk with paying no closing costs, which is ideal.


20 posted on 05/07/2011 3:10:40 PM PDT by newnhdad (The longest of journeys begins with one step.)
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To: newnhdad

Just take the best deal between the two. One lender is just electing to make less money on the deal to get the business. They take part of their profit and pay your closing costs. Its just that simple. I have been in the mortgage business for 27 years. Good luck.


21 posted on 05/07/2011 6:06:03 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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