Purchasing a home: BoFa home loans, follow-up questions
I spoke to a Bank of America home loan specialist yesterday, and I did ask him all I have, but I have some follow-up questions, because some of you may have tried loans with other banks / credit unions / others: 1) My FICO score returned by Bank of America account online is 748. The home loan specialist said that this is usually an overestimate of the actual FICO score. Is this correct, has anyone experienced this? Also, their rate for FICO score of 748 is 3%, but if I had 780+ FICO score, then the rate would be 2.75%. Has anyone used BoFa home loans, and has anyone tried to increase their credit score to 780+? How can I increase my credit score as soon as possible? 2) Paying downpayment with margin loan using Interactive Brokers: Interactive Brokers has this nice margin loan option with 1.59% until 100K, and 1.09% for above 100K. I'm almost fully invested in stock market, and I don't want to sell, so I want to use margin loan (say transfer 400K to IBKR, in which case they will lend me 200K, which will be good for 20% downpayment of a 1M home). Has anyone tried this? I told this to BoFa home loan specialist, and he said "we need to know the terms (duration / interest rate of payment schedule of the margin loan) to approve our own loan with your downpayment paid via IBKR margin loan". Why does BoFa care where the downpayment comes from? Has anyone done this, take a home loan from a bank or credit union, and make the downpayment via a margin loan from IBKR? 3)Prequalification: When does prequalification happen? Can I get prequalification and home loan application approved the same day? What else do I need, to make best use of 90-day period after my prequalification?
By the time you improve your credit score the rates may change. Also what is this 90 days period? They won't lock this rate for such a long period. They will either offer a higher rate or lock closer once you are ready to close the house
1) if credit score is over 740 - most lenders will provide best rates already ... increasing it quickly is tough ... make sure any open revolving credit have balances under 30% of limit ... make sure that there are min of 2-3 active credit lines being used as having no or little credit won't help 2) yes - if you are borrowing funds for your down payment .. the loan has to be secured and the terms of the loan have to be provided to lender 3) prequalificiation should be able to be provided quickly once you apply and provide data depending on lender- bigger banks tend to be slower - fyi - you should get pre approved and not pre qualified if you are planning to make offers
BofA gives 0.125% rate discount for each $250k you move to them. It seems like you have a lot of money so you can move 1M, get the rate down to 2.5%, maybe they even let you buy some points and make it even lower.
Could this be for some companies only? I already own >500K but less than 1M in BoFa / Merrill, and the home loan specialist didn't mention this.
No. I'm poorer than you and they even offered me this. Ask the loan officer. If they don't know about it, change the officer ASAP. You can move in increments of $250k, up to 1m. Your problem might be that your money is already with them so they have no incentive to lower the rate. Bring them more money from elsewhere.
BoFA… deez nuts
I second this ^
Alternatives?