As I mentioned earlier, I submitted a request to LendingTree at about lunch time today and around 1:30pm, Diane from LendingTree’s “Incubation Department” gave me a call to introduce herself and give me an idea of how LendingTree’s process works. Essentially, she will be the interface/middlewoman between myself and twenty-seven lenders (her number). I don’t know if there will be a premium put on the interest rate for this great service, but that’s what the competing offers from LoanWeb and MonsterMoving (where they don’t get involved, they just give out information) are for.
In talking to Diane, I told her I would want a $250k mortgage for a $300k house with the $50k down payment funded by my own savings and help from my parents. It turns out, when you put down less than 20% and part of it is a gift, you have to show at least 5% of that down payment comes from your own savings. Luckily, I’ll be able to contribute at least $15k of my own funds so I will be in the clear with regards to that.
Diane said a pre-approval letter, which is not binding, would be processed in 24-48 hours once I provided the following pieces of information (which would be used for a credit check):
- 2 Year’s W2’s
- 2 month’s bank statements (or other verification of down payment)
- 1 months pay stubs
I could send it in an email or fax, two very convenient options, but I question the security of the transmission medium. I will definitely not send it across email because it’s not going to be encrypted. At least with the fax, I don’t know enough to know it’s not safe. 🙂
I asked her if I could nix out specifics, like bank account numbers and social security numbers (they already have that anyway), and she went into her talk about how the security at LendingTree is good and my information will be kept confidential, etc. I could black it out but eventually, when I really locked in a loan, I’d have to provide it. I think I will black out the account numbers this time around because I don’t want them to have it in the event I go with another lender or if I decide to rent for another year.
Then I thought to check online, there were 9 offers waiting for me. The first on the list was a 7/1 ARM (the product I want) for an APR of 5.91% with HSBC Mortgage Corp. Clicking on Offer Details, I found that estimated fees (Tax Service, Underwriting, Processing, Document Prep, and Credit Report) would be $995 but the fine print indicated this didn’t include:
pre-paid interest (depends on the day of the month you close your loan), real estate taxes & escrows, settlement or closing service fees, title insurance, recording fees, hazard insurance fees and pest inspection. (sheesh!)
I looked at a few of the other offers (A 30 Yr. Fixed from National City had a monthly payment only $60 higher) and one thing I realized was that none of them talked about PMI. I know for a fact that I’d have to get a PMI because $50k/$300k is only 16.7%, under the 20%. I’ll have to call up Diane and ask about getting a second loan to avoid PMI…
As a comparison, I’ve only received one other email with regards to a mortgage from a loan officer from Annapolis First Mortgage. Granted, it’s not LoanWeb or Monster’s fault, they probably just disseminate information to the companies in their network so the chain is longer; but the direct communication with LendingTree gives them a significant leg up. LendingTree seems like a very professional outfit and I’ve been very impressed with them so far. The turnaround time is very important to me because I hate having to wait to get things done.