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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..
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.
Two things that should help you price your mortgage:
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.
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.
@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.
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.
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.