Shopping for a mortgage

[Mustonen]

Obviously eliminating the structural biases would go a long way to bridging that gap, but if you read down in those articles it’s more insidious than that. Banks use things like where you shop in their models. So yeah, if you have the same income and credit history as Joe Blow white guy, AND you shop like a white guy, you’ll have the same credit score. But shopping like a woman would lead to a different score potentially.

No. “Where you shop” is not an input into the scoring model. There is no potential for “shopping like a woman” to lead to a different score, unless by “shopping like a woman” you mean something like maintaining higher balances on credit cards compared to credit limits, opening lots of department store cards, or being less likely to be a borrower on things like mortgages and cars.

Lenders use the credit score as a single component to inform credit decisions. Some will take spending habits into account. Some will take overall relationship into account. There are compliance concerns with anything that gets too creative as you have to start to worry about disparate impact and UDAAP, and there is very little objective support for going much beyond the standard credit score/income/collateral decision model. Experienced lenders often think there is a secret sauce, and they’re almost always wrong.

[riser4]

What's worse is employers using credit scores. That's next level fucked up.

[sirbumpsalot]

What's worse is employers using credit scores. That's next level fucked up.

Cancel culture has already eclipsed that level by a mile.

[riser4]

Cancel culture has already eclipsed that level by a mile.

Only affects you if you are a complete asshole. And then you probably deserve it.

[Supermoon]

No. “Where you shop” is not an input into the scoring model. There is no potential for “shopping like a woman” to lead to a different score, unless by “shopping like a woman” you mean something like maintaining higher balances on credit cards compared to credit limits, opening lots of department store cards, or being less likely to be a borrower on things like mortgages and cars.

Lenders use the credit score as a single component to inform credit decisions. Some will take spending habits into account. Some will take overall relationship into account. There are compliance concerns with anything that gets too creative as you have to start to worry about disparate impact and UDAAP, and there is very little objective support for going much beyond the standard credit score/income/collateral decision model. Experienced lenders often think there is a secret sauce, and they’re almost always wrong.

From the first article I posted:
“American Express has created internal risk scores based on where customers shop, and “it was up to the unhappy Amex customers to guess which establishment had poisoned their credit.” There’s every reason to believe that what Amex is doing is typical of the industry, and it is certainly emblematic of the dangers of this system”

Maybe FICO is generally understood, but there are hundreds of different scores with no transparency into how they are built. There is absolutely no way to believe they are on the up and up when all history and evidence points to the contrary.

[Mustonen]

From the first article I posted:
“American Express has created internal risk scores based on where customers shop, and “it was up to the unhappy Amex customers to guess which establishment had poisoned their credit.” There’s every reason to believe that what Amex is doing is typical of the industry, and it is certainly emblematic of the dangers of this system”

Maybe FICO is generally understood, but there are hundreds of different scores with no transparency into how they are built. There is absolutely no way to believe they are on the up and up when all history and evidence points to the contrary.

No. This would just about have to be a system/model created and implemented by an issuer (a financial institution who “issues” cards, like AmEx), and even then they would only see transactions processed on their own cards, not competitor cards. Nobody else has access to this information.

The hundreds of scores are almost, to a one, built on information obtained from the credit bureaus, which does not contain transactional data. Individual lenders create their own “scores” that can include all kinds of stuff, but these should not be confused with credit scores built on credit bureau info. Like I said before, diverging too far from credit score/income/collateral is dicey and most don’t. This is not conjecture.

Tilt at windmills all you want. There are certainly flaws. But credit scores are a reflection of inequities more than the driver of inequity that you imagine.

[glademaster]

Just locked in a 30 year fixed rate new home loan at 2.99% with a 1.038 lender credit and $0 in closing costs. Not amazing compared to a few months ago, but I'm very pleased considering I'll likely own the place for less than 10 years.

[smmokan]

Just locked in a 30 year new home loan at 2.99% with a 1.038 lender credit and $0 in closing costs. Not amazing compared to a few months ago, but I'm very pleased considering I'll likely own the place for less than 10 years.

So does that mean we get to hear you bitch about Colorado winters for another 10 years? Fabulous.

[glademaster]

So does that mean we get to hear you bitch about Colorado winters for another 10 years? Fabulous.

Hopefully just 5-7 years. I'm not getting any younger and there are still a whole lot of places I want to live.

[jmedslc]

Hopefully just 5-7 years. I'm not getting any younger and there are still a whole lot of places I want to live.

That’s an interesting take. I’m definitely in the mindset of cutting my Utah time in half and getting some new views in front of me.

[summit]

Anyone got a rec for refi on a car loan?

[whyturn]

Anyone got a rec for refi on a car loan?

Credit union rates are strong. Should be 2-2.5%


Sent from my iPhone using TGR Forums

[krp8128]

Anyone ever dealt with EMM?

https://www.emmloans.com/

I just got an (unsolicited) pre approval letter at 2.5%

[RootSkier]

I am pulling max cash out of a refi to start a major remodel, gettin quoted 3.625, which is quite a bit higher than I expected. Should I keep shopping or is this just the premium for a cash out?

[soul_skier]

I am pulling max cash out of a refi to start a major remodel, gettin quoted 3.625, which is quite a bit higher than I expected. Should I keep shopping or is this just the premium for a cash out?

Starting a remodel right now with materials costs where there are seems like a questionable choice. Is there a a reason for the accelerated timeline or can you push it back?

[RootSkier]

We are just doing the design phase for now but I am concerned interest rates are going to go way up so we are stockpiling cash. We won't tear off the roof until next winter.

[liv2ski]

Need more details. For example a $700k value and a new loan amount of $500k. SFR, owner occ, 760+ credit scores. Per the below example, at 3% all the non recurring costs are covered by the $3k credit. You may want to keep looking.

[RootSkier]

Thanks, just sent you a PM.

[liv2ski]

Replied, so do a Zillow search for lenders as your bank is f###### you with no lube.

[CovertM]

I am pulling max cash out of a refi to start a major remodel, gettin quoted 3.625, which is quite a bit higher than I expected. Should I keep shopping or is this just the premium for a cash out?

Just closed yesterday with similar situation. Locked 2.99% about 3 weeks ago, not sure how much movement has happened since. I'm pretty sure it was the same rate regardless of cash out or rate and term. Liv2Ski could probably clarify that.

[evdog]

My mortgage has been sold or new servicer assigned a few times in the last two years now. I want to change from monthly payment to bi-weekly so that the principal will be drawn down faster over time. But the way companies seem to handle this seems shady.

From the document I just received from latest loan servicer: "Bi-weekly draft: Half of your monthly payment is drafted on the same day every other week. We will hold the first half-payment until we draft the second half-payment, and then we will credit the full payment to your loan resulting in a payment credited monthly. During the two months out of the year where there are three drafts, the extra payment is applied towards principal resulting in a full extra payment applied towards principal each year. Paying additional principal can result in reducing the amount of interest paid over the life of your loan and decreasing the length of time necessary to pay your loan in full."

So these assholes just hold my money for 2 weeks each month for free? Nice deal for them. WTF is the point of this option, unless your cashflow situation won't support a full payment all at once. The point of doing bi-weekly payments is the interim half-payment is applied to the loan balance sooner, resulting in slightly reduced accrued interest so more of the payment goes to principal, with sizeable savings over time. Or am I naïve for thinking this is how it should work?

The previous servicer was even worse. To set up bi-weekly payments they required a full month's mortgage payment up front. Then they would apply half of it to the loan balance each time they drafted another half-payment. Again, they're sitting on my money for free.

Haven't gone in to set up my online account with new servicer yet but hopefully I can just pay some extra each month which will accomplish the same thing.

/rant

[Mustonen]

Partial payments on mortgages, particularly those sold on the secondary market, are a PITA with surprisingly high servicing overhead. Rules are dictated by the investor. Fannie and Freddie require that you either hold them in escrow or that you return them.

I’m sure your servicer sucks, but this isn’t shady, it’s just how it is.

You can certainly make extra payments to principal after your monthly contractual payment obligation has been satisfied. That’s more or less what your last servicer was doing with similar net effect to biweekly payments.

As with all things, you can refer to your contract for clarity on this.

[liv2ski]

Biweekly payments = 26 a year or 13 monthly payments. Just divide your monthly principle by 12 and send in the extra principle reduction each month with your payment. No need to over think this.

[dan_pdx]

I could Google this, I'm sure, but I'm lazy. Can you refi a primary residence if you think you might move in the next year but nothing is set in stone? (Assuming that primary would become a rental after a move.)

[altasnob]

I assume yes. I never told my lender when I moved out of my primary residence and started to rent it. I am not aware of any duty to do so. I did tell my home owners insurance and switched from home owner to home owner who is renting insurance and bought an umbrella policy to fill in liability cracks.