Wednesday, May 9, 2012

Day 61 - Rate Lock, PMI Drop and Floor Time

Today is officially 30 days out, and we locked in our interest rate at 4% with a 1.375% credit towards closing.   I think the $0 (Nothing towards closing, no cost to get rate) rate was 3.75% but cash towards closing today has a lot more value to me.    

Here was how I justified going with a higher rate.  The monthly payment difference between the 2 rates ends up being about $35/month, so I am paying more to get that 1.375% off my closing costs -- but it will take 10.25 years of $35/month to reach the break even point, and if you factor in the future value of that money with 10 years of compounding interest that stretches it out to 12 years.   So if we stay in this house (actually this mortgage...) for more than 12 years then we would have been better off with the lower rate, but up until that point we are winning. Plus my stress level of bringing less to closing is priceless.  

Second great thing today --  NVRM loan officer changed our prepaid PMI policy to a different vendor based on our credit scores and we saved almost $1200 on this charge.  

Honestly, this is the first time I felt NVRM rewarded us for having good credit -- through the rest of the process I was starting to feel like they were suspicious of everything we provided and were convinced we were a credit risk, despite not being one at all.   The level of documentation they require is borderline insulting, but maybe every mortgage company is like this now.  It has been almost 5 years since I have been through the process, but I remember it being a breeze the first 2 times.   Credit Check, 2 paystubs, a W2 or so, and you were good to go.  

3rd Thing -- and I didn't even think about this one, but when you close (varies from state to state and county to county) in Montgomery County ohio the seller (NVR) owes the buyer (Me) a prorated amount of real estate taxes.   My rough calculation is $8.44 / day since January 1st until closing.   I knew I owed this to the buyer of my new home, but never thought of the reverse.   Loan officer brought it up, and says it might chop as much as another $1200 off the amount due at closing.  
Montgomery county uses the SHORT method of proration, which can be confusing (http://www.daytonmortgagebankers.com/consumers/taxproration.html for more info)


Lastly,  I stopped over hoping to see some siding but there still is no siding -- but the hard wood floors are going in,   Thankfully I still like the color we picked 5 months ago.


13 comments:

  1. That's interesting....in other blogs I have noticed that they install the cabinets first and then the floors. It looks like the opposite happened for you.

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    1. I noticed the same thing, but I wasn't sure if they had hardwood or laminate, and I didn't go back to check. It would definitely be easier to install floors first, but the material cost is more so I understand why they would floor around the cabinets.

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    2. We got Saddle. It looks very similar.

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    3. We have vinyl in the kitchen and they installed the flooring first.

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  2. What color are your hardwoods? They look gorgeous!

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    1. 2 1/4" Gunstock

      http://www.armstrong.com/flooring/hardwood/gunstock-red-oak-2-1-4-in-solid-hardwood-strip-C211/floor-110278.asp

      The 2nd photo is probably the closest to what it looks like in person.

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  3. NVRM requires a lot more documentation than other mortgage companies. This is our third house and we never had to provide this much documentation. They had to call and verify our employment today with a salary key request. I had never heard of this. We refinanced a few months ago with BB&T and it was a breeze. We are in the same boat, we have excellent credit, but feel like we are not being rewarded for it. You happened to lock in at an excellent time. Rates are at record lows. I hope they are still there in about 45 days when we can lock in.

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    1. It's the multiple levels of verification that are annoying. I think I mentioned this in a earlier post, but for our 2010 Tax return we sign a form allowing the IRS to give NVRM our returns and status (paid,etc). They got that, then they wanted a copy of the check that we paid our taxes with -- even though the IRS said we had no balance. Then it was a copy of the bank statement the month the check cleared. All of this for something that took place 11 months before we ever talked to NVRM. The second thing is their issues with any deposits to your account. They want to verify your funds aren't coming from a gift, but I have had to have documentation and explanations for every deposit that was not a payroll direct deposit. I had to open a new separate checking account just to take some deposits from things I sold on ebay. My all-time favorite was last week when I had to sign a form explaining the 4 pulls on my credit report since last December.

      ALL 4 WERE NVRM PULLING MY CREDIT. They wanted me to explain why THEY were looking at my credit to THEM. All I can do is laugh at this point.

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  4. I think NVRM was super easy to work with. All we had to provide was W2's and two paystubs. Our approval took less than two weeks.

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    1. Our initial approval was very easy as well. When it gets closer they do the real approval (initial is good for 90 days, which expired mid-march for us) and that is when they want everything.

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  5. I bet it is a load off your mind to get all the finances locked in at a good rate! I am with Maria in hoping that the rates are still low when it is my turn to lock them.

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