Parchayi.com – Personal Finance Simplified

Bank of America recently acquired our mortgage from Everhome. We refinanced with Everhome in July from VHDA. Both VHDA and Everhome let me setup automatic recurring payments and they let me pay until the 15th of the month without any problems.

Here is the table of payment options from Bank of America:

	Mortgage Pay on the Web	Bill Pay	Transfers
Who it’s for	Anyone with a Bank of America mortgage	Bank of America mortgage customers with a Bank of America personal checking or savings account	Bank of America mortgage customers with a Bank of America personal checking or savings account
Fees per transaction	$0 – $6.00, depending on payment date (never a fee if paying from a Bank of America checking or savings account)	None	None
Payment cycle	One-time payments	Make both one-time and recurring payments	Make both one-time and recurring payments
Payment date(s)	Same day1, up to 30 days in advance	Set up same-day, future-dated or recurring payments	Set up same-day, future-dated or recurring payments
Pay From account	Checking or savings account at any financial institution	Bank of America checking or savings account	Bank of America checking or savings account
Payment flexibility	Must make at least the minimum payment due2 You can also add additional principal, escrow or other fees to your payment	Must make at least the minimum payment due2	Must make at least the minimum payment due2

If you notice the above table says that recurring payments are only available if you use a Bank of America checking account, which I do not have and have no intentions of opening another account to complicate my life.

Also to make matter worse, Bank of America does not let me schedule multiple payments at the same time. Since I have one pending payment now, I cannot schedule my next payment. I cannot also modify my current payment without cancelling it and rescheduling it.

The table also implies that there might be a fee for paying from your regular non-BOA checking account depending on your payment date. Here is the fee schedule:

If you are paying from an account at a bank other than Bank of America, this service is available at no charge when scheduling your payment to be deducted on available draft dates during the first 1/3 of your grace period or before. When scheduling your payment to be drafted during the second 1/3 of your grace period, you will be charged a $3.00 fee that will be included at the time of your deduction. For the last 1/3 of your grace period or after, you will be charged a $6.00 fee that will be included at the time of your deduction.

This is provided in a table when I try to schedule a payment:

So in short, Bank of America Mortgage Sucks. I don’t want a Bank of America checking account and I want to be able to pay on the 15th like I always have before and I want to be able to schedule these payments automatically like I always have.

On Friday rates dropped to 4.5% for FHA loans and 4.625 for Conventional with 0 points from many lenders as long as you had good credit. However working with lenders is painful. I found lenders from interest.com (owned by bankrate) and I started calling the ones with lowest fees. I actually started on Thursday when rates were an 8th of a point higher.

The first lender I called – Atlantic Mortgage and Funding had lender fees of only $195. I always compare everybody to quotes from aimloan.com, who provide their quotes online on one of the best designed websites for home loans. I would have gone with aimloan but their rates for high LTV loans were higher and they only do conventional.

My 4.625% has only a $195 lender fees and AIM’s has a lender fee of $1995.So
I am beating them by $1800. If you would like to try to lock in today please
give me a call and we will start the application process.

Thank you,

Daniel Dunn
President
1-866-443-9777

Come Friday when I actually started to apply, the fees had gone up to $663.

$675 is the listed lender fee. This includes Credit Report, Tax Service, and
Underwriting. They actually total $663.000.

…

Kimberly A. Jones
Toll Free: 866-443-9777

Basically this sounded like a lender taking advantage of the situation and trying to charge more because more people are applying. Anyway I called them to apply anyway because they were the cheapest on interest.com even after the fee hike but as I started applying I got some cock and bull story – “Interest rates are about to change now and we can’t originate any loans for the next 10-15 minutes. Can I call you back after that?” So I say fine and there is no call. When I call back, I get the story that interest rates have gone up 0.75%. Bullshit. Anyway, I check back on interest.com and I see that their fees have gone up to $995. Also on their GFE which they wouldn’t honor within the hour had title costs that totaled $1764, which is ridiculous. Maybe my mentioning that I want to use my own title company caused them to drop me as a customer? Maybe they get kickbacks?

The second lender I called, United Mutual Funding, was much better and more upfront about everything and I applied with them. Their total costs came out to be a little less than  Atlantic and they pulled my credit report and I was all set. Or so I thought. I get an email some time later that they cannot do FHA loans in Virginia, only conventional. Crap. By the time I see that email, it is beyond 4:30 and I really want to get this done on Friday.

I am not going to be able to secure a FHA loan for you, unfortunately. I just learned that our FHA approval does not extend to Virginia properties. We are only able to originate FHA loans in FL. I will have your credit card reimbursed for the cost of the credit report.

I am terribly sorry about this. I can still offer you the conventional loan but I don’t think that is something you wanted. Please let me know.

Regards,

Erica Guthrie
UMFC

So a quick visit to interest.com to find the next lender I can try and I find Everbank. I call them up because their website doesn’t list FHA rates, I ask what they are and it turns out that they are also at 4.5% (after I asked if they can do 4.5 with excellent credit, the original quote was 4.625), which I was able to lock. Also their fees turned out to be the lowest amongst all the above. They provide a rate lock for 30 days but the agent admitted that they cannot close within 30 days due to high volume but the first lock extension is free and they will close with that time.

Now I’m keeping my fingers crossed that our appraisal keeps our LTV below 97.5%. We’ve paid off  11% of our initial mortgage balance in the last 5 years but our county assessment has dropped 26% from it’s peak in 2006.

If you are also considering an FHA loan with high LTV, keep in mind that FHA charges an upfront Mortgage Insurance Premium of 2.25% (which is generally rolled into the loan, so your new balance will be higher than the previous one). Also whether you go FHA or conventional, you will have to pay monthly mortgage insurance. Since FHA charges the upfront MIP, the monthly payments are lower. They total about 0.5% of the original mortgage amount each month. With the conventional, the monthly payment for PMI (Private Mortgage Insurance) is higher, I’d say about 0.75% but there is no upfront fee.

Another thing to keep in mind is that with FHA, the Insurance stays for a minimum of five years. It can be dropped after five years when you reach 78% LTV. With Conventional, PMI can be dropped at any time as long as you reach 80% LTV. You have to get an appraisal and petition the mortgage company. Either way with a high LTV loan it takes a lot more than 5 years to reach that level unless you pay significant amounts of principal.

So you’re hunting for a house? You want to make use of the 8000 new home buyer credit? You look at closing costs and you get a shock. You look around for lenders and everyone quotes wildly varying numbers for the same things and you are not sure who to pick or what will actually save you money or whether the good faith estimates are correct. Here is a simple guide on figuring out which lender is best for you.

First thing naturally to compare is the Mortgage Rate and the APR, which directly affect your monthly payment. In todays times, 30 year fixed rates are probably your best option which makes things a little simpler. Just compare rates/apr and monthly payments for the same kind of loan across lenders. Find the ones that best suit you and start narrowing down lenders.

But once you find the rate, how do you know whose closing costs are the lowest? For that exclude all the items that the lender has no control over such as taxes and insurance. Next take out everything to do with Title insurance and settlement costs (sometimes put in as Attorney costs). These are just estimates from the lender and often lenders will make very low estimates to make their closing costs appear lower.

What remains (mostly items that are numbered in the 800′s on the Good Faith Estimate) is what the lender has control over and will often negotiate if you try and pit lenders against each other. These items include Origination Fees, Processing Fees, Document Preparation Fees, Mailing Fees, Commitment Fees etc.

Simple thing to do is make a spreadsheet which just lists all these for each vendor and then sum them up to find the lowest.