Starting The Process

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Starting the process of buying a home has been stressful. As Greg put it, “You never really know when the process has started.” I think I consider the process started now that I’ve made first contact with a mortgage broker.

I started out this morning at 10:10a by leaving a message with the assistant to a mortgage broker, Beth, who a friend of mine recommended. I was told Beth would call back at 11:00a.

At 11:35a I started getting impatient, and after talking to Greg and figuring I should talk to three or more mortgage brokers (to really shop around), I put in a request with to get in touch with one of their brokers. From their web site, it’s looking like I can get a 30 year loan at 5.5% - 6.125% and get around $185,000 for $1050 - $1124 a month (without insurance or taxes).

11:55a - Marty called me up and referred me to a broker named Ann who he’s worked with several times. Went online and got her contact info. Decided to call her after lunch.

It’s looking like rates at Oregon Telco for a 30 year loan will be about 5.5% on a 30 year fixed loan.

1:25p - Beth finally called back. I gave her some information and she’s going to call me back tomorrow with some numbers.

1:45p - Left a message with Ann. She’ll call back.

2:35p - Ann called. She’s probably the most helpful person I’ve talked to so far and after talking to a couple of people, it turns out everyone who works with NW Mortgage Group is happy with their service.

It seems there are a few ways to go with this loan. I can put less than 20% down on the house and pay mortgage insurance; I can be “self-insured” by putting at least 20% down; or I can do some “creative loan manipulation” and get an 80% first mortgage, 10% second mortgage, and put 10% down (or 80/15/5, or whatever). With the third option, you’d have the same monthly payment, but you’d be paying towards two different loans and wouldn’t have to have mortgage insurance.

Sounds like, assuming an arbitrary guess for taxes and insurance, for a monthly payment between $1300 and $1500 a month (including the taxes/insurance), I could get between $193,000 and $220,000 with a 5% down payment on a 30 year loan. To get some firm costs, though, I need to settle on a loan amount and figure out how long I’m planning on staying at the house.

Now I need to start comparing one broker to another. According to Ann, you need to get what’s called a “Good Faith Estimate” from each broker which lays out the fees and such. Then you can compare apples to apples (so to speak) and see who’s actually getting you the better deal.

It’s starting to sound like a catch-22, though. I can’t get a firm loan cost until I decide on a house, but it’s hard to really get a house until you know how much you can afford.

I’ll wait to hear back from Beth tomorrow and see what she says. I’m hoping to hear back from, too, to see what they recommend. Pending on what they say, I’ll probably get ahold of all of them to get those “Good Faith Estimates” and start comparing brokers.

At this point, I’m leaning towards Ann, though. She called me back quickly, she was the most helpful, and she spent the time to work things through with me. Doesn’t hurt that I’ve heard recommendations from three different people for them.