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Here is the new credit question. The old trusted mortgage guy at GMAC offers 7.75% (closing costs unknown - will ask and post tomorrow). A new guy at "US Mortgage" a company that called me after I applied on lendingtree.com offers either 6.5% with a $3200 point, or 6.825% without the point. And closing costs without the point of about $3400. Note, the closing costs on the last place with GMAC were pretty high so I am guessing they will be higher than US Mortgages offer.
US Mortgage is a smaller place, I asked he said they had 30 branches.
www.usmortgage.com, their webpage looks kind of tacky. Can I trust an unknown company like that for something as big as a mortage? Anyone know about them or have advice on where to go from here or how to research further?
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This is a prime example of how smaller lenders can be so much more flexible, and why I perfer them overall to the big boys. Just be sure that you know what you're signing with them. READ the mortgage. Sounds dull, and it is dull. But do it anyway. IMO, it is the buyer/borrower's job to make sure everything is on the up and up. Nobody cares about your money like you do. You can either protect it, or you can't complain later that you got 'screwed' by the bank. Read the docs. And you don't have to wait until closing to get a copy of the mortgage docs from the lender. Ask for them before the closing and review them first, then you just have to verify that they give you the same docs at closing. Most important, don't let the lender bully you - insist on getting what you need to make the deal work.
Anyway, obviously US Mortgage is giving you a much better deal. Personally, I wouldn't pay the $3200 point. Here's the break down on $250k for each:
6.5%, $1580 per month, $318k in total interest over 30 years
6.825%, $1633 per month, $338k in total interest.
So if you pay $3200 now, it'll take you 53 months to get your $3200 back from savings in the payments you get on the lower rate. Plus, you only save like $20,000 over 30 years. If you were to take that $3200 and invest it in a mutual fund that only shows a 9% return, you'd end up with $42,000 over 30 years. So do that instead.