On safari: Watch out for those lions!

It's been quite the odyssey steering our metaphorical Jeep through the wilds of Loan Land these past couple of weeks. Our lives lately have consisted largely of comparing the offerings of various mortgage companies so that we could get preapproved prior to looking at houses, thereby reducing the chances of processing delays once we've actually found the place we're ready to buy. I solicited friends, family, co-workers, and trusted web sites for recommendations, and got quite a few.

Several of the companies I called made me feel like I'd been launched into space as I rode out their epic hold times and voicemail trees, far removed from any living organism and hurtled into a monotonous and infinite landscape.

Others had people who answered right away, but might as well not have bothered. Two of them were simply message-takers for the loan officers, none of whom were in the office despite it being well within the business day (and one of whom never returned my call). One person I got was severely English-challenged and couldn't answer my questions coherently. And then there were the couple of people I reached from whom getting any meaningful information was like pulling teeth. My favorite responses:

Me: What is your interest rate today on a 30-year fixed, conventional mortgage for a detached, single-family house, assuming a purchase price of [specific dollar figure], a down payment of [specific percentage], [specific number] points, and a FICO score of [specific score]?
Them: Oh, it really depends.

Me: What are the application and closing fees you charge?
Them: Anywhere from nothing to $900, it all depends on the customer!
Me: Are there any other fees you charge that I should know about?
Them: There's also [X, Y, and Z].

And the grand prize winner:

Me: Can you tell me...
Them: You know, in all the time you've been asking me questions, you could have already completed a loan application with us!

We did manage to finally identify a company that seemed like a good bet. The rep I spoke with, who works out of her home office, had been referred to me by my dad, and was straightforward, responsive, conscientious, intelligent, and friendly with a great sense of humor. But what really sold us was a unique feature they offered: lender-paid mortgage insurance! Ordinarily, people who make down payments of less than 20% on their home purchase are required to pay Private Mortgage Insurance (PMI), which in our case would add another $200 or so to the monthly bill until we'd built up enough equity to reach 20% of the original purchase price. These guys waive it for you right off the bat in exchange for your paying them an additional 1.4% of the total loan amount upfront which, when you do the math, actually comes out to far less than we'd be paying cumulatively as PMI -- especially at a time when the rate of appreciation is slower than in recent years. We had been warned by our For Dummies book that companies offering lender-paid MI were likely to charge higher interest rates than others, but this was not the case. My hubby compiled a master spreadsheet comparing all the rates, fees, and monthly payments for the various companies I had called, and this one offered us a clear advantage.

VA loans also offer the benefit of no PMI, but in nearly every case but one that we investigated, the interest rates for those were actually higher, and we received warnings from several sources not to opt for one unless absolutely necessary because a lot more red tape is involved in order to successfully obtain a specific property -- especially older properties. Many sellers are biased against VA-loan-holding buyers because the home purchases they make tend to be more vulnerable to unraveling for one reason or another.

Another point in favor of the mortgage company we chose was the generous availability of our loan officer. On several occasions, she suggested that we call her after-hours and on weekends with questions...and we took her up on it. She was reachable as promised, and consistently provided satisfying answers to our questions.

So, we moved forward with the pre-approval process, which was done partially by phone and partially via fax and went relatively painlessly, all things considered. We now have our letter in-hand and are ready to go forth and explore actual properties. Our loan officer's reaction when she pulled up our credit reports: "These are, like, the highest scores I've seen -- ridiculous! You have less debt that I do! You guys are sickening." Much laughter ensued. Hopefully this bodes well for the future!