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4.7 interest rate with a 702 credit score!!???

4.7 interest rate with a 702 credit score!!???

So I pretty much did everything I could to improve my credit score before getting approved for a mortgage. Paid off car, all my credit cards (to lower my DTI) and rehabed my student loans. Fast forward 14 months (January) and we go back to the mortgage broker and my middle score is up 40 points to a 702 (woohooo)...got preapproved at 4.2%... not horrible but I was hopping for at the worst maybe a 4.0%. Fast forward 1 month (yesterday) we talk to the Broker and he tells us rates are rising and now we are looking at rates of 4.7 and higher. I feel so deflated.. We are buying New Contruction that won't be ready until July.. by the time we close on rates could excede 5%.. We know people who got loans last year at 3.6% with decent credit... 5% is nuts! I wasn't quoted a rate that high when my middle score was 660. I'm so disappointed!
Message 1 of 15
14 REPLIES
Established Member

Re: 4.7 interest rate with a 702 credit score!!???

I struggled too when we locked our rate at 4.5%.  

 

Just put it in perspective.  Our first house was a 5.75% rate in 2004 and that was good.  Many years ago people had 6-7% interest rates.  4.x% is a good rate - though I know it's annoying when rates rise and you can't do anything

Message 2 of 15
Valued Member

Re: 4.7 interest rate with a 702 credit score!!???

When I applied for my FHA, the average rate for a 620 credit score in Tennessee was 5.25% That was back in December. Due to the increase in rates in the bond market, we are seeing an increase in mortgage rates as well. Since December, I only saw interest rates dip ONCE, they have been increasing since this summer I believe. When I closed on my house last week, the Tennessee average for a 620 credit score was 5.39%.  Today is Feb 4 and the average for a 620 credit score is now 5.536%.  So you can have great credit but depending on when and where you decide to look for house, you are at the mercy of the bond market and increasing rates.

 

Message 3 of 15
Regular Contributor

Re: 4.7 interest rate with a 702 credit score!!???

Just closed an 80% Conv. 2nd Home at 4.25% broke my heart but “back in the day” we thought we lucked out with a 10% Fixed.
Message 4 of 15
Valued Contributor

Re: 4.7 interest rate with a 702 credit score!!???

First house I bought the rate was 9.75%

Message 5 of 15
NGG
New Member

Re: 4.7 interest rate with a 702 credit score!!???

Rates might have been higher back than but cost of housing vs income was lower so people could handle higher rates. I live were the cost of housing is going up 15-20% a year the past few years and with higher rates added to that it's becoming more and more difficult for even people with good jobs to buy any think. We have a bachelors and a master's and only 9% of income towards debt and we are struggling to get a no frills older condo. Even with saving 3k a month we can't catch up to the raising prices or rates. This is crazy.

Message 6 of 15
Frequent Contributor

Re: 4.7 interest rate with a 702 credit score!!???


@wrote:

Rates might have been higher back than but cost of housing vs income was lower so people could handle higher rates. I live were the cost of housing is going up 15-20% a year the past few years and with higher rates added to that it's becoming more and more difficult for even people with good jobs to buy any think. We have a bachelors and a master's and only 9% of income towards debt and we are struggling to get a no frills older condo. Even with saving 3k a month we can't catch up to the raising prices or rates. This is crazy.


It feels like a bubble.  My 2020 prediction says that people will wish that they had remembered 2008. "Shoulda used that 2020 vision" will be the joke to help ease the pain.  Could be wrong, and buying at peak only really matters if someone is over extended, or has large emergency. But...

Message 7 of 15
New Contributor

Re: 4.7 interest rate with a 702 credit score!!???

In the same boat! 721 and I'm right under 5% (I also am putting down a lower amount of $$)...my loan officer said it's just the market right now *eye roll*

 

My parents said to look into re-fi within the next few years, and that's what I'll do.


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Message 8 of 15
New Member

Re: 4.7 interest rate with a 702 credit score!!???

This sucks! I am doing a new construction as well - when i was preapproved in November 2017 with a 783 mid score, my rates were quoted at 3.75% - 4%....now watching them rise as a wait to do a rate lock for end of April close date is nerve wrecking....

Does anyone have pros/cons of maybe doing an ARM and then refi before the initial period is up? In my novice mortgage brain, I see at least being able to get a lower rate to start and then refi when rates get better????

Message 9 of 15
Frequent Contributor

Re: 4.7 interest rate with a 702 credit score!!???


@wrote:

In the same boat! 721 and I'm right under 5% (I also am putting down a lower amount of $$)...my loan officer said it's just the market right now *eye roll*

 

My parents said to look into re-fi within the next few years, and that's what I'll do.


That is the market right now... Market in 5 years could be in the 7% or 8%. Be glad you're still under 5%. I pre-approved someone who had a 701 score at 4.875%. Market rate for that score is at 4.625%. I did that because I don't know when he'll find a home and if rates increase, he's covered by that extra bump.

Mortgage Loan Officer in Greater Chicago area plus 47 states.
Message 10 of 15