Do I go with CountryWide for my first mortgage?

Question

My husband and I have lived in apartments for the past 10 years of our marriage. However with the recent adoption of our daughter, we want to "settle down" into a home of our own. We were stupid in our early twenties and made a mess of our credit score (back then who even thought about their credit scores???). With alot of work and an excellent job promotion we were able to bring up our score up a total of 120 points within the last 6 months.
We looked into CountryWide for a mortgage (a realtor suggested them in passing) and though our score isn't high enough for a 80/20, we did qualify for a 100% loan but with a higher intrest rate (between 7 and 7.25) and PMI.

My question is do we even consider this offer with the mortgage economy and CountryWides reputation?
Do we look at our own bank even though we have a very small down payment saved ($5,000 )and our credit score isn't at 660 (which we were told was the magic number for a great interest rate? ) but well above 620?

Answer 1

KEEP SHOPPING!!!!!

If you were my client, with a score above 620, I'd get you 100% financing at about 6.25-6.5%, plus PMI.

Countrywide is very big. That doesn't necessarily make them good. The vast, vast majority of the loans in their portfolio were not created by them. They were bought from brokers and other banks.

Their retail loan officers aren't always that experienced, though they do at least get some training. And they're limited in their products.

Call a few brokers, one or two banks, and ask what rates they'd offer for a My Community Mortgage. That's almost guaranteed to be the product you are being offered by Countrywide. And unless you're combining that product with an interest-only period or a 40 year term, or both, you should not have to pay rates that high. Actually, if you did a 40 year term, interest-only for the first 10 years, you still shouldn't have a rate that high, but it'd be close (6.75-7.00?).

Get some competing offers. It is true that 660 is about the starting point for 80/20's, only because few banks offer 100% 2nd mortgages to anyone with a score under 660. The ones that do are likely to charge double-digit rates, and then PMI becomes the cheaper option anyway.

Countrywide isn't the only game in town. Not by a longshot. Worst-case, you'll find that they happened to be your best deal anyway. Unlikely, but possible. But at least you'll have confirmed it.

PS: You said you have $5000 saved. I don't know what kind of price range you are looking at, but you should also inquire about FHA financing. FHA requires a 3% downpayment. That $5K is 3% of about $167K. Another grand gets you eligible for a $200K purchase. FHA loan limits vary by county, but most areas can go as high as about $275K. So you're not far off. And FHA fixed rates today are about 6.00%, no minimum credit scores. Just one other option to ask about, see if it's right for you. FHA will allow a gift from family for your downpayment, so if you were only $1-2000 short, perhaps you could find some help from family?

And if you do that, actually under either option, make sure you structure your purchase offers to have the seller pay your closing costs.

Answer 2

Countrywide is great.

From my experience there are some CountryWide's lenders out there who will do 100% financing with a 620 score depending on what type of documentation you are going to use. If you verify and prove your last three months of income, you will get the best rates. Just make sure whatever you do, don't take more than a 1 year prepayment penalty.

Also make sure to read your disclosures. I recommend you to better put the $5000 in a savings account than use it for down-payment. It's just peanuts to the bank... They are more interested in your monthly premium. Countrywide is not known for the most competitive rate on the block, but they still are a good, stable bank. However, I would also inquire with an experienced, recommended Loan Officer of CountryWide to get more detailed information.

Good Luck!

Jere

Answer 3

Countrywide is great. I would also inquire with an experienced, recommended Loan Officer with another company so you may get some perspective. Countrywide only offers Countrywide's products. A good mortgage broker/lender will be able to offer Countrywide and many others.

Answer 4

Countrywide doesn't have a bad reputation but their rates are going to be higher. There are many other lenders out there who will do 100% financing with a 620 score depending on what type of documentation you are going to use. If you go full doc (meaning you can verify and prove your income through pay stubs and w-2's) you will get the best rates. Just make sure whatever you do, don't take more than a 1 year prepayment penalty. Make sure you read your disclosures. I wouldn't recomend putting the $5,000.00 down because really it ins't going to matter to the bank. Put it in a savings account for just in case days. You would want to get a realtor who will negotiate seller concessions for you (up to 6% with most lenders). So if you are puchasing a home for $100,000.00, 6% seller concessions would be $6,000.00. This would pay for all of your closing cost and you would get your earnest money back if the concessions covered everything. This is really the best and most savvy way to go when you are working with little money. Wells Fargo, Green Point, Wilmington are very very competitive rate and terms right now. Good luck. Countrywide is not known for the most competitive rate on the block, but they still are a good, stable bank.

Answer 5

CountyWide is a higher interest lender. If your credit score is above 620 you will be able to get a fair interest rate if not a good one with another lender. Banks sometimes have stricter guidelines on mortgage loans than other lenders. You may want to try a mortgage broker to find you the best possible rate with the best lender for your situation. Just watch the fees with mortgage brokers so you don't get ripped off. Read this page at http://www.mortgageawareness.com/mortgagebroker.html to learn how mortgage brokers charge fees.

Answer 6

I tell folks to SHOP, SHOP, SHOP. There are so many lenders and so many loan programs that it can be confusing. There is more to it than rates-eg points, closing costs. A good way is to find a site with some comparison rates.

Be careful every time you check with someone they will run a credit report-the more of those the worse off you are. That is not the case with comparison sites.

If you are in the market for a mortgage, home equity loan, or refinance you can get up to 4 FREE No Obligation Mortgage Rate Quotes via http://www.m-o-r-t-g-a-g-e-r-a-t-e.com

Answer 7

You should talk to a minimum of three lending sources, and as many as you can tolerate.

There are more different lending programs than just the 80/20 and the 100 with PMI. There are many ways to structure this for your best advantage, depending on your total circumstance. The odds of getting the best one from the first person you talk to are fairly slim.

Answer 8

7.00 to 7.25% is right on for 100% financing using a FNMA product such as the My Community or Flex 100.

Have your lender investigate FHA for you. You can get an interest rate (30 Year Fixed) as of Friday for as low as 6.375%. This is almost 1% lower.

It's the way to go for first time home buyers.

Visit my blog http://mortgagecounselor.blogspot.com for further information or my website www.johnleblanconline.com.

Strictly informational. Email if I can help further

Answer 9

Yeah I would see what another bank (or two) can offer. My fiance and I have excellent credit & the first bank we went to still did not giev us a really good interest rate. Se what else is out there for sure.

Answer 10

If it is a true 30yr fixed that means it will be fixed for 30yrs. When signing your loan docs you need to pay attention to you note. When you sign your note it will tell you your rate and if it is adjustable. Be on the look out for "adjustable balloon rider". If you have one of those forms in your loan docs BEWARE you have an adjustable rate.