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Rate Question

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jwpezd
Regular Contributor

Rate Question

Hello

 

I am currently at the last stages of the construction process and find myself in quite the situation..  I am using the builders lender and feel I am getting jacked around.

 

Current scores Ex 676 Eq 662 TU 698

 

purchase price 393k

5% down payment

 

the lender is quoting my rates at 4.35 with $440 in monthly PMI, when I first spoke wth them in March rates were higher and I was getting quoted 3.85 335 in PMI..

 

Can anybody provide adivce here??  this is causing my monthly payment to go up nearly $400 from what I was expecting.. 

Chase Freedom-(1000) BOA 123-(2000) Home Depot-(4000)
Discover IT-(1000) Lowes GE-(1500) Orchard Bank-(300)
Regions Student Visa-(500) Best Buy Reward Zone-(500)
In the garden till 4/01/2015
Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: Rate Question

Rates are definitely lower now than they were in March. If you go FHA, you should be able to lock in a rate around 3.5% with your scores. The only reason your PMI would change (conventional) is if your credit score changes or down payment size changes. 

Message 2 of 10
Anonymous
Not applicable

Re: Rate Question

Two things that should help you price your mortgage:

 

1) http://www.consumerfinance.gov/owning-a-home/explore-rates/?utm_source=checkrates&utm_medium=redirec...

 

 

2) http://www.radian.biz/page?name=MIRateFinder#rateCalcResults

 

 

The PMI rate of $440 seems to be accurate. You can also look into other PMI calculators but I've seen the one I've listed is exactly accurate for my PMI I received my builder/lender. That rate of 4.35% doesn't seem right in my opinion. I'm sure you should be a little closer to 4%. Check out what other lenders in your area are giving.

Message 3 of 10
Anonymous
Not applicable

Re: Rate Question

That rate and PMI are accurate if you were to go conventional. FHA will be about $260-$300 cheaper per month - I would ask your lender for an FHA quote.

Message 4 of 10
jwpezd
Regular Contributor

Re: Rate Question

I guess I am confused as to how I was quoted 3.875 when rates were higher. The MLO did explain the PMI has gone up since we started. I do not believe FHA is possible due to the loan size.
Chase Freedom-(1000) BOA 123-(2000) Home Depot-(4000)
Discover IT-(1000) Lowes GE-(1500) Orchard Bank-(300)
Regions Student Visa-(500) Best Buy Reward Zone-(500)
In the garden till 4/01/2015
Message 5 of 10
StartingOver10
Moderator Emerita

Re: Rate Question


@jwpezd wrote:
I guess I am confused as to how I was quoted 3.875 when rates were higher. The MLO did explain the PMI has gone up since we started. I do not believe FHA is possible due to the loan size.

Where are you - geographically?  

 

You can google FHA max loan limits for your city/town and state to get an idea of the max allowed. In my county it is $345k max but it is different in different counties and much higher in high cost areas.  $200-$300/month is significant. Also if you go FHA you don't have that high MI rate that you are being quoted for conventional.  In conventional mortgages the MI rate is tied to your credit score and your LTV. Not for FHA, it is a straight 85 basis points on the loan amount.

Message 6 of 10
jwpezd
Regular Contributor

Re: Rate Question

Max is 288k... This is a pretty big blow on the purchase as when we were entering the contract the rate and MI was significantly less with the same scores and LTV.
Chase Freedom-(1000) BOA 123-(2000) Home Depot-(4000)
Discover IT-(1000) Lowes GE-(1500) Orchard Bank-(300)
Regions Student Visa-(500) Best Buy Reward Zone-(500)
In the garden till 4/01/2015
Message 7 of 10
StartingOver10
Moderator Emerita

Re: Rate Question

If I remember correctly, all the PMI co's went to a different schedule in April 2016 - the new rates are higher for lower scores and lower for higher scores. Take a look at this for an example:

 

https://www.mgic.com/rates/rate-cards.html

 

Find out from your lender who the MI company they are using for your loan to see what you can do to fall into a lower cost bracket. Scores and LTV are weighted heavily in conventinal PMI rates.

Message 8 of 10
jwpezd
Regular Contributor

Re: Rate Question

I am 4 points away from the 680 mid score bracket which is $110 difference. Any idea what the rate difference is? At 4.35 and 441 in MI that prices us out of the house and we may have to walk. Would I lose my earnest money?
Chase Freedom-(1000) BOA 123-(2000) Home Depot-(4000)
Discover IT-(1000) Lowes GE-(1500) Orchard Bank-(300)
Regions Student Visa-(500) Best Buy Reward Zone-(500)
In the garden till 4/01/2015
Message 9 of 10
Anonymous
Not applicable

Re: Rate Question

The rate for PMI at 680 should be near 1.08% and cost around $336/month. I don't know where you live so it'd be hard to get a close estimate on your interest rate. You can use the CFPB link I sent earlier to input your numbers and area to see what lenders in your area are doing. For example, with a 680 score and 5% down on a 393k home, lenders are offering around 3.625% or lower. This is just a rough estimate but you should be able to get 4% or less with the way rates are right now. My wife's mid mortgage score is 713 and we locked a 3.75% rate last week. Be sure to have your realtor read over your contract for stipulations about earnest money. There may be a clause that will refund your money in the event you can't qualify.

Message 10 of 10
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