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Should I use Penn Fed or another bank for the mortgage on my primary residence?
Old 09-05-2012, 06:00 PM   #1
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Should I use Penn Fed or another bank for the mortgage on my primary residence?

I am buying my siblings' interest in the family home. I already have my name solely on the deed. I want to give them their 1/4 share (there are 4 of us) of the property since my dad died about 10 years ago and my mom passed away in February 2012. This is part of administering my mom's estate and I am the executor.

I need a mortgage product called a refinance with cash out. I called Penn Fed and the mortage rep was very helpful. I asked if advertised rates for fixed 30 year mortgages are the same as rates for a refinance with cash out mortgage. She said with Penn Fed the rates on these products are the same, but this is not true for all banks.

Based on a hypothetical mortgage scenario that the Penn Fed rep and I worked through, she said I may incur a .25 point ($375) and approximately $2,500 in closing costs on a 3.5% 30 year fixed refinance with cash out mortgage. Bankrate.com seemed to show other banks offering a refinance mortgage with no points and lower closing costs.

My question is whether I should go with Penn Fed for the refinance with cash out mortgage or should I use another lender? How do I find the best mortgage "deal" for me? I have never obtained a mortgage before, so I am not sure how to get the best deal, with the least amount of hassle, from a quality lender.

I think that the Penn Fed rep said one advantage of having a mortgage with Penn Fed is that they service all of their loans and that the mortgage wont be switching from lender to lender.

Do I just use bankrate.com and find the lowest APR, lowest points and lowest closing costs and confirm that it applies to refinance with cash out mortgage?

Thank you for your insight.
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Old 09-05-2012, 08:56 PM   #2
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Quote:
Originally Posted by midnighter777 View Post
Do I just use bankrate.com and find the lowest APR, lowest points and lowest closing costs and confirm that it applies to refinance with cash out mortgage?

Thank you for your insight.
I believe that PenFed has a fine print line on their mortgage rate webpage that says that all fixed-rate mortgages incur a 1% additional fee. Verify if this applies to the mortgage you're looking at or not.

However, having said that, after going through a HELOC and (most recently) a 5/5 ARM with PenFed, I would choose them hands down if the prices/rates were pretty close. PenFed isn't out to try and nickel and dime you and screw you any which way they can, since their goal is to serve their members (aka YOU). I would trust their good-faith estimate, whereas anything from any other bank/finance company, I would assume the 'good faith' would not include a variety of fees that would show up at closing day that would somehow not need to be disclosed or would otherwise somehow be crammed down my throat.

In my experience, PenFed has had consistently highly competitive rates - make sure what you're looking at on bankrate.com or other websites is for your zip code, cash out, etc.
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Old 09-05-2012, 09:12 PM   #3
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I believe that PenFed has a fine print line on their mortgage rate webpage that says that all fixed-rate mortgages incur a 1% additional fee. Verify if this applies to the mortgage you're looking at or not.
Thank you. This 1% additional fee is something I will have to look into further. The Penn Fed rep did not mention the 1% additional fee specifically, she just said the total approximated closing costs would be around $2,500.00
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Old 09-06-2012, 09:15 AM   #4
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I would guess the closing costs include the 1% fee.

If you like their 5/5 ARM product, I would go with Pen Fed. I have had two of those loans and no complaints. For 30 year fixed loans, I don't think they are the cheapest. I suggest you google "mortgage professor" and read up before you do anything. There is not a lot of transparency in mortgage proicing, so it is easy to make a mistake. I recently refinanced with www.boxhomeloans.com in part because their prcing was good and they took pains to make things transparent, but I don't think they do business in NJ. If you can find a lender that will put everything on the table in writing and guarantee pricing, that is half the battle.
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Old 09-06-2012, 10:15 AM   #5
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I would guess the closing costs include the 1% fee.

If you like their 5/5 ARM product, I would go with Pen Fed.
Thanks for your response. The 5/5 ARM product is not a good choice for me.
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Old 09-06-2012, 07:51 PM   #6
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Three years ago I refinanced with Pen Fed, going with a 4.99% rate with no closing costs, didn't even have to pay for an appraisal.
I'm in the process of doing a cash out refi now but Pen Fed isn't in the ball park because of their closing costs.
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Old 09-07-2012, 08:49 AM   #7
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I applied for a Penfed loan on about 7/15/12. At the time, I don't recall the fine print on the website disclosing a 1% origination fee. It didn't say either way.

Now, this link discloses that they don't charge the 1%. When I locked, I wasn't charged the 1%.

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The applicant is responsible for the following fees and costs at the time of closing (except 5/5 ARM): Origination fee (waived for all ARM loan programs, 30 year fixed conforming and 15 year fixed rate loans > $417,000), appraisal fee, tax service fee, CLO access fee, title fees, transfer tax fees, credit report fee, flood cert fee, recording fee, survey if required and work verification fee, escrow reserves and interest due until first payment, other cost may be included due to program specific circumstances. This is not intended to be an all-inclusive list.
I think this changes periodically, so I'd check it daily, like the rate. But, once you lock, they send you the specifics on your particular loan.

I closed on 9/4. Loan was less than 75% LTV. Otherwise you pay points or fees or whatever you wanna call it to Fannie or Freddie or whoever. My closing costs were less than $1700 (plus escrow).

I locked at 3.625, then it went up to 3.875? or so, now I see it's down to 3.375 today for a 30 year fixed.

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Old 09-07-2012, 09:24 AM   #8
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I applied for a Penfed loan on about 7/15/12. At the time, I don't recall the fine print on the website disclosing a 1% origination fee. It didn't say either way.

Now, this link discloses that they don't charge the 1%. When I locked, I wasn't charged the 1%.



I think this changes periodically, so I'd check it daily, like the rate. But, once you lock, they send you the specifics on your particular loan.

I closed on 9/4. Loan was less than 75% LTV. Otherwise you pay points or fees or whatever you wanna call it to Fannie or Freddie or whoever. My closing costs were less than $1700 (plus escrow).

I locked at 3.625, then it went up to 3.875? or so, now I see it's down to 3.375 today for a 30 year fixed.

-CC
Thank you for sharing your experience. This is helpful information.
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