My score is in the 790's and my wife is a little over 800. We are looking to purchase a home in the next few months. We have the 20% to put down and I was wondering if loan rates are negotiable? I feel like I am not using my good credit and money down to it's full advantage if I just take whatever my broker tries to give me. Oh yeah, we also have very little debt, we have a car payment and we are looking at selling that so we won't even have that by the time we buy the house. Rates look like they are about 6% right now, think its possible to get under 6% somewhere?
With your excellent FICO scores you should absolutely shop around, especially looking into a local credit union. From what you described, I would expect a 30 year fixed rate somewhere below 6%. I would even wait another month or two to see if there is another fed rate cut, which could put you around 5.75% perhaps. I would even look into paying for points to go even lower. Good luck to you, and work from strength here and use the present market conditions and your awesome credit to your advantage!
Mortgage rates are always negotiable, pay more in origination/discount fees, you get a lower interest rate... don't want to pay the origination/discount fees, your rate is higher than if you did.
If someplace doesn't have a rate you think is fair, shop around, you can always ask them to lower the rate they are offering you without charging additional fees... but if they do that it means they didn't offer you their best deal from the get go, integrity is put on the line, etc, basically you probably would want to go elsewhere in that situation. It's a good test to ask the lender/broker that question though, you'll see if they were padding the rate to make extra, or if they were indeed giving you their best deal.
As far as a future rate cut, the CBOT Fed Futures index is already pricing in a rate cut, but when the actual event of the FOMC cuts the rate, it doesn't guarantee mortgage rates will go down afterwards... most of the time it has the exact opposite impact. Rates skyrocketed upwards after the recent FOMC policy change was announced, only in the last couple days have they started to come down again. When the FOMC cuts the Fed Funds & Discount rate, it is used to stimulate the economy, consumer spending, etc., when consumers start spending more stocks usually go up in price.. the individuals who trade stocks balance their portfolio out by also investing in safer, slower moving, investments, such as treasury bonds. Mortgage rates are closely tied to the yields on treasury bonds. When one part of the market has become more lucrative than another, money is shifted, and in that situation money is shifted out of treasury bonds, which decreases the price and inversely increases the yield on treasury bonds... thus we see an increase in mortgage rates. When the FOMC cuts the Federal Funds & Discount rates, it affect short term debt tools like HELOCs, auto loans, credit cards, and returns on bank CD's... so those rates are immediately affected. History has also shown that mortgage interest rates tend to get a little higher during the holiday season as well.
With refinancing, and not in a situation where you must refinance, you have all the time in the world to see where mortgage rates go... but when you purchase a home, it should be based upon that you are ready to purchase a home and the local real estate market, not based on the assumption that rates will get lower down the road.
Generally you'll find 30-year fixed rates in the low 6's right now, with excellent credit PenFed has some really attractive mortgage rates, think they might be at or below 6%, but excellent credit & equity/down payment is a must.
Mortgage brokers serve a great purpose (I am one) but for excellent credit & large down payments, banks tend to be just as, if not more, competitive. I suggest you shop around, get a quote from a mortgage broker, your own bank, PenFed perhaps, and a "big bank" like Wells Fargo or Bank of America.
Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime) since 2002, based in Irvine, CA and lending in all 50 states