12-29-2016 08:36 PM
Does anyone know what this means.
1.75% Funding fee can be waived for an increase of .375% to the interest rate
which is better?
12-30-2016 08:32 AM
The seller wont pay a dime.
I thought the interest would be better since you can deduct that?
12-30-2016 08:46 AM
I guess it's going to depend on how long you stay in the house. If you plan on staying in the house several years, then it would make more sense to pay the funding fee since you'd recoup it over time with the lower payments over the life of the loan.
12-30-2016 03:30 PM
Since there's a tradeoff between paying the fee upfront now, or spreading out the cost over time with a higher interest rate, this is a calculation definitely worth considering for anyone looking for a HBC loan, or interested in purchasing points as well. I do a simple "break even" calculation that tells me how long I need to own a property before I realize the benefit of paying 1.75% upfront. For any of these programs where you trade upfront costs for lower interest rates, you will always always win in the long run by paying upfront. The question is when? In your case, the exact number of months you need to own the property for it to make sense to pay 1.75% now is dependent on the rate you are quoted, but it should be about 58 months, +/- a few months. If you plan on owning your home longer than that, by all means pay the fee now and take the lower interest rate. Good luck!
01-02-2017 07:40 PM
Actually I plan on moving south in 3+ years .. sooner if I can so I guess I will take the rate hike. TYVM!
03-18-2017 02:09 PM - edited 03-18-2017 02:10 PM
I'm thinking about that option as well. The zero down with no required PMI is pretty darn hard to not take advantage of it. I just need to look at the long term and see which is better. Also you can have the funding fee rolled into the loan as well.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.