ARE YOU RATE SHOPPING FOR A NEW HOME LOAN?

Have you ever wondered, why do the experts tell you not to waste your time shopping rates?

Rate shopping is like buying a new car from a car dealership. The first thing they ask is, “What do you want your payment to be?” Well, as we all know, the monthly payment has little to do with the dealer’s mark-up on your new car. A little number crunching will reveal that what you thought was a good deal is actually stuffing the dealership’s bank account with YOUR hard-earned money.

Mortgages are the same way. If all you focus on is rates, you will not get the best deal. We have prepared a form comparing Goodfaith Estimate’s called “Comparing Apples to Oranges”

That’s why I think it is so important to speak with my clients and advise them on the best mortgage program to choose. There are a lot of factors that need to be considered, such as your credit rating, you’re financial goals and your short and long term plans, and of course closing costs.

TIP FOR THE DAY: Do not let everyone run your credit report, it DROPS your credit score!

Please call me today so that we can make positive decisions now that will affect your financial future!

Sincerely,

Randy Woodruff

President / CEO

541-471-9000

541-471-4344 Fax

randy@homelend.com

RW/mw

“Professional Service is only a phone call away!”

www.randywoodruff.com www.homelend.com www.grantspasshomeloans.com

COMPARING APPLES TO ORANGES!

Comparing Goodfaith Estimates…

The Goodfaith Estimates vary from lender to lender. The bottom line is to compare several areas of the Goodfaith that are variables! For example the escrow and title fees are preset no matter what lender you choose to go with. The most important things to review are the interest rate, the points to be charged to buy that particular interest rate, and garbage fees.

Comparing Interest Rate and Points…

Before you can compare interest rate and points, you need to understand Matrix Pricing. Remember the golden Rule – There is no free lunch, it sounds too good to be true, I can get something for nothing. The best way to understand Matrix Pricing is that you can pay NO POINTS but you are receiving a higher interest rate to offset the points. The more points you pay the lower the interest rate. For example...

5.375% 1.25 points

5.500% .750 points

6.000% 0.00 points

Garbage Fee’s…

Some parts of the closing costs are garbage fees and some are not. Here is just a few garbage fees: Application Fee, Administration Fee, Inspection Fee, Lender rate Lock-in Fee, Warehouse Fee, Loan Committee Review Fee, etc.

Bottom Line…

The bottom line is to perform a Break Even Analysis on the differences! Take Goodfaith “A” and “B” and subtract the difference in housing payment and the points and it will tell you how long it will take you to break even. Ask around to find out what lender will really deliver. Find out about a Lenders Reputation.

At Home Mortgage Lending Inc.

We go above and beyond the Federal Regulation and disclose the total amount of money you will need to bring into escrow to close, not just lender charges. We explain all the charges, that way there’s no surprise.

Don’t Forget Service – You get what you pay for!

The Bottom Line

Goodfaith “A” Goodfaith “B” DIFFERENCE

Loan Amount ______________ ______________ ______________

Interest Rate ______________ ______________ ______________

Points ______________ ______________ ______________

Payment ______________ ______________ ______________

Loan Origination ______________ ______________ ______________

Loan Discount ______________ ______________ ______________

Appraisal ______________ ______________ ______________

Credit Report ______________ ______________ ______________

Inspection Fee ______________ ______________ ______________

Application Fee ______________ ______________ ______________

Tax Service Fee ______________ ______________ ______________

Processing Fee ______________ ______________ ______________

Underwriting Fee ______________ ______________ ______________

Wire Transfer Fee ______________ ______________ ______________

Demand Fee ______________ ______________ ______________

Commitment Fee ______________ ______________ ______________

Lender Lock-in Fee ______________ ______________ ______________

Warehouse Fee ______________ ______________ ______________

Mortgage Insurance ______________ ______________ ______________

Escrow Fee ______________ ______________ ______________

Title Search ______________ ______________ ______________

Title Examination ______________ ______________ ______________

Document Prep. ______________ ______________ ______________

Notary fee ______________ ______________ ______________

Attorney Fee ______________ ______________ ______________

Title Insurance ______________ ______________ ______________

Recording Fee ______________ ______________ ______________

Tax Stamps ______________ ______________ ______________

Pest Inspections ______________ ______________ ______________

Flood Certificate ______________ ______________ ______________

Impounds ______________ ______________ ______________

Hazard Insurance ______________ ______________ ______________

Pre-paid Interest ______________ ______________ ______________

Property taxes ______________ ______________ ______________

Flood Insurance ______________ ______________ ______________

HOA/Condo Fee ______________ ______________ ______________

Total __

ANSWERS:

Which program “A” or “B” is better?

Take the total closing costs, interest rate, mortgage payment and points and compare!

Total Closing Costs ______________ ______________

Interest Rate ______________ ______________

Points ______________ ______________

Payment ______________ ______________

Should we SPEND money on POINTS?

Use this form and compare a loan with points to a loan without any points being charged.

Use the same Mortgage Broker to keep all charges the same.

Take the mortgage payment on “A” subtract mortgage payment from “B” – put the difference here ……..____________(1)

Take the total points on “A” subtract the total points from “B” – put the difference here ……………………____________(2)

Divide answer 2 by answer 1. This answer is the number of months that it takes for the Loan to breakeven.