Q: I've been getting a few mortgage quotes, and am wondering how to negotiate/lower "points." It seems ridiculous to be quoted a great mortgage rate, and then find out I have to pay more to get that great rate.
A: Mortgage lenders generally publish the lowest mortgage rates they offer, and these rates are available only to the best qualified borrowers. If your credit isn't the best, paying points can be worthwhile for bringing down your mortgage rate. On the other hand, if you have strong credit, and can afford to make a larger down payment, that may reduce points paid. Talk with lenders, and always remember to compare mortgage quotes, ask questions and negotiate lender fees, including points.
Q: We've sold our current home and have made an offer on another, but we're having problems with closing on the new home. We made a short sale offer on a home that's close to foreclosure, but it seems that everyone and their brother has to approve our offer. The sale of our home closes next week, and we don't fancy living in our minivan with two kids, two cats, a parrot and our dog. Can you help?
A: Short sales can work well for both buyers and sellers, but unfortunately, a short sale must be approved by the sellers' mortgage servicing company, the home loan investor, and possibly a mortgage insurance company. Each entity may have its own criteria for approval, which keeps the mortgage servicer busy trying to coordinate the approval process. In the meantime, you may be able to negotiate a per diem rental agreement on your current home until your new home closes. Make sure that the seller's real estate agent knows that timing is everything for this deal to work.