topic Re: Fha interest at 5.25 in Mortgage Loans

Fha interest at 5.25

girlonmission — Fri, 28 Apr 2017 09:49:12 GMT

Hi guys,

Is the fha interest rate based on your credit score? I have an loan at 270 after down payment and closing cost. But I am quoted 5.25% interest. When the lender pulled my middle earlier in the month I was 607. I was waiting for statements to close and post. He told me it didn't matter as long I was above 580 I was good. My bought my new report a week later my new middle was 620. A couple more accounts have closed since then. Anyway I think 5.25 is kinda high. What do you think? Should I shop around? Is the interest rate for fha based on federal rates? If so so how do I get that? Thanks

Re: Fha interest at 5.25

Anonymous — Fri, 28 Apr 2017 12:30:01 GMT

Your credit score factors in, if i remember correctly you need above 660 to qualify for best rates with FHA. Rates are down around 4.8 based on my last email from my lender.

Re: Fha interest at 5.25

Anonymous — Fri, 28 Apr 2017 13:00:53 GMT

I raised mine 25 points from the 1st pull in January. I too bought mine here to see before I contacted my lender as I knew I had gone over 700 which is what I was trying to do. They resubmitted me with the new scores (basically a new loan app I guess) so I could get the better rate to lock in at. My LO is amazing, and she was even so happy for me so it was great they did that. I'd call your LO and tell them to see if it helps.

Re: Fha interest at 5.25

StartingOver10 — Fri, 28 Apr 2017 13:32:43 GMT

@girlonmission wrote:
Hi guys,

Is the fha interest rate based on your credit score? I have an loan at 270 after down payment and closing cost. But I am quoted 5.25% interest. When the lender pulled my middle earlier in the month I was 607. I was waiting for statements to close and post. He told me it didn't matter as long I was above 580 I was good. My bought my new report a week later my new middle was 620. A couple more accounts have closed since then. Anyway I think 5.25 is kinda high. What do you think? Should I shop around? Is the interest rate for fha based on federal rates? If so so how do I get that? Thanks

Do you have the lender contributing toward your closing costs and pre-paid expenses?

Are you having a new home built and this is the builders' lender?

5.25% is high if you are NOT having the lender pay for your closing costs and pre-paids. If the lender is paying those costs, depending upon how much the lender is paying, the 5.25% might be right in line. Same is true if you are having the builder pay.

A llittle more info would help.

BTW, I have seen market rates down to 620 with no lender contribution toward your costs. FHA interest rates aren't sensitive to credit scores like conventional interest rates. Having said that, individual lenders can, and do, have their own overlays.

Re: Fha interest at 5.25

CreditWarrior21 — Fri, 28 Apr 2017 16:06:51 GMT

This does seem odd to me. I am also buying a home on the FHA program and was locked in this week at 3.8% with a 662 middle score.

I'm not sure how much credit factors into FHA but 5.25% does seem high. Perhaps shop lenders?

Good luck!

Re: Fha interest at 5.25

girlonmission — Fri, 28 Apr 2017 17:06:15 GMT

no the lender is not paying for anything. The seller is giving me 11k towards closings and prepaid cost. I am putting 10400 down. the selling price was 289000, the seller agrees to 275000 plus 11000 in closing contributions. the inspection report came in yesterday, wind mitigition with 4 point report, elevation certificate, I got insurance at 810 a year. all good.

he said my payment will be 1890 a month. I have attached a copy of the fee details. Loan amount 270019, interest rate 5.25%, monthly PI 1491.05. Mortgage insurance 187, plus escrow 212. Total monthly payment 1890. Closing costs: 160161 (includes 10992 in loan costs + 5069 in other costs - $0 in lender credits)

Total to close : 8042

Re: Fha interest at 5.25

JediNeo — Fri, 28 Apr 2017 17:12:16 GMT

If you look at box A (% of loan amount), there is no dollar amount for points, so you are getting some credit for your rate. Have you asked your LO what the next rate down looks like? Would you see be getting a credit, or would be paying (points) to have that lower rate?

Re: Fha interest at 5.25

StartingOver10 — Fri, 28 Apr 2017 17:30:57 GMT

I would shop your loan with other lenders if I were in your shoes.

This worksheet you show has some discrepencies:

The escrows for insurance are for a $1300/year policy and not a premium that is $810/year. So you should see some changes there when your LO updates.

Is the tax escrow reflective of actual taxes or is this new construction?

I suspect that you have new construction because you have an additional $200 fee for the final inspection and because you said the seller is paying $11k and the lender is charging you for it in the rate. To me, that is a standard builder tactic. Please advise if you have new construction or a resale. It makes a huge difference.

The title fees for you are enormous. Have you contacted the title company directly to get a breakdown for a property with your sales price?

Re: Fha interest at 5.25

DallasLoanGuy — Fri, 28 Apr 2017 17:33:30 GMT

@StartingOver10 wrote:

BTW, I have seen market rates down to 620 with no lender contribution toward your costs. FHA interest rates aren't sensitive to credit scores like conventional interest rates. Having said that, individual lenders can, and do, have their own overlays.

they arent as sensitive as conventional.... but below 640 gets a rate adjust. and at 620 and 580 they adjust more.

but 5.25% seems high unless they are covering a lot of costs

Re: Fha interest at 5.25

girlonmission — Fri, 28 Apr 2017 17:52:10 GMT

@JediNeo wrote:
If you look at box A (% of loan amount), there is no dollar amount for points, so you are getting some credit for your rate. Have you asked your LO what the next rate down looks like? Would you see be getting a credit, or would be paying (points) to have that lower rate?

i just sent that your exact statement to the LO. I am waiting.

Re: Fha interest at 5.25

VALoanMaster — Fri, 28 Apr 2017 18:01:17 GMT

@girlonmission wrote:
Hi guys,

Is the fha interest rate based on your credit score? I have an loan at 270 after down payment and closing cost. But I am quoted 5.25% interest. When the lender pulled my middle earlier in the month I was 607. I was waiting for statements to close and post. He told me it didn't matter as long I was above 580 I was good. My bought my new report a week later my new middle was 620. A couple more accounts have closed since then. Anyway I think 5.25 is kinda high. What do you think? Should I shop around? Is the interest rate for fha based on federal rates? If so so how do I get that? Thanks

Hi Girlonmission,

You need to run, not walk, from this lender. 5.25% is a least 1% too high plus they're charging you Loan Origination, Processing & Underwriting fees!

Re: Fha interest at 5.25

VALoanMaster — Fri, 28 Apr 2017 18:13:56 GMT

@JediNeo wrote:
If you look at box A (% of loan amount), there is no dollar amount for points, so you are getting some credit for your rate. Have you asked your LO what the next rate down looks like? Would you see be getting a credit, or would be paying (points) to have that lower rate?

Hi JediNeo,

Sorry but you're mistaken. Box A clearly lists an Origination Fee of $995 plus Processing & Underwriting Fees. What this means is the lender decided to break down their fees instead of charging 1% or more for an origination fee. When you look at it this way, the total amount the lender is charging is a little less than 1% of the loan amount so it "looks" like the OP is getting a good deal but it's not when you look at the rate. At 5.25%, there should be zero lender fees & a large credit towards the OP's closing costs.

Re: Fha interest at 5.25

girlonmission — Fri, 28 Apr 2017 18:17:53 GMT

See that’s why I love you guys. I am running faster than a cheetah.

I don’t know why he puts 1300 for insurance when it’s 810. He has a copy of the quote. I gave it to him the day before.

It’s not a new construction. It’s was built in 1991. The last year taxes was 1305.

I did not contact the title company. I don’t know who the LO is using, but I am going to find out.

My real estate agent sent me to a LO he trusts, he already pull my files he said he can go to 4.8 but he will get try to get me at 4.2 or 4.3. he also helping me getting a $2000 tax credit.

I live in Naples, FL.

Re: Fha interest at 5.25

JediNeo — Fri, 28 Apr 2017 18:23:51 GMT

@VALoanMaster wrote:
@JediNeo wrote:
If you look at box A (% of loan amount), there is no dollar amount for points, so you are getting some credit for your rate. Have you asked your LO what the next rate down looks like? Would you see be getting a credit, or would be paying (points) to have that lower rate?
Hi JediNeo,

Sorry but you're mistaken. Box A clearly lists an Origination Fee of $995 plus Processing & Underwriting Fees. What this means is the lender decided to break down their fees instead of charging 1% or more for an origination fee. When you look at it this way, the total amount the lender is charging is a little less than 1% of the loan amount so it "looks" like the OP is getting a good deal but it's not when you look at the rate. At 5.25%, there should be zero lender fees & a large credit towards the OP's closing costs.

My apologies, thank you for the correction

Re: Fha interest at 5.25

VALoanMaster — Fri, 28 Apr 2017 18:47:18 GMT

@girlonmission wrote:
See that’s why I love you guys. I am running faster than a cheetah.

I don’t know why he puts 1300 for insurance when it’s 810. He has a copy of the quote. I gave it to him the day before.

It’s not a new construction. It’s was built in 1991. The last year taxes was 1305.

I did not contact the title company. I don’t know who the LO is using, but I am going to find out.

My real estate agent sent me to a LO he trusts, he already pull my files he said he can go to 4.8 but he will get try to get me at 4.2 or 4.3. he also helping me getting a $2000 tax credit.

I live in Naples, FL.

Hi Girlonmission,

Here's the truth. A lender can tell you upfront what they can do rate wise right out of the gate. It's nonsense for the lender to say they'll try to get you down to 4.2 or 4.3%.

Here's what I'm talking about. Right now, the interest rate pricing for your score, loan amount & location is 4.875% with no "points" That just means instead of paying a percentage of the loan amount to buy the rate down you're taking the "par" rate. The pricing right now if you did buy your rate down by 1 point is 4.375%.

If your lender isn't breaking this down for you upfront, you can't really trust them. In addition, if they aren't giving you the option to do this, you can't trust them.

Re: Fha interest at 5.25

VALoanMaster — Fri, 28 Apr 2017 18:51:55 GMT

@JediNeo wrote:
@VALoanMaster wrote:
@JediNeo wrote:
If you look at box A (% of loan amount), there is no dollar amount for points, so you are getting some credit for your rate. Have you asked your LO what the next rate down looks like? Would you see be getting a credit, or would be paying (points) to have that lower rate?
Hi JediNeo,

Sorry but you're mistaken. Box A clearly lists an Origination Fee of $995 plus Processing & Underwriting Fees. What this means is the lender decided to break down their fees instead of charging 1% or more for an origination fee. When you look at it this way, the total amount the lender is charging is a little less than 1% of the loan amount so it "looks" like the OP is getting a good deal but it's not when you look at the rate. At 5.25%, there should be zero lender fees & a large credit towards the OP's closing costs.
My apologies, thank you for the correction

Wow, now that I've reread my response, it definitely come "out" the wrong way. I apologize.

Re: Fha interest at 5.25

girlonmission — Fri, 28 Apr 2017 18:59:36 GMT

@VALoanMaster wrote:
@girlonmission wrote:
See that’s why I love you guys. I am running faster than a cheetah.

I don’t know why he puts 1300 for insurance when it’s 810. He has a copy of the quote. I gave it to him the day before.

It’s not a new construction. It’s was built in 1991. The last year taxes was 1305.

I did not contact the title company. I don’t know who the LO is using, but I am going to find out.

My real estate agent sent me to a LO he trusts, he already pull my files he said he can go to 4.8 but he will get try to get me at 4.2 or 4.3. he also helping me getting a $2000 tax credit.

I live in Naples, FL.
Hi Girlonmission,

Here's the truth. A lender can tell you upfront what they can do rate wise right out of the gate. It's nonsense for the lender to say they'll try to get you down to 4.2 or 4.3%.
Here's what I'm talking about. Right now, the interest rate pricing for your score, loan amount & location is 4.875% with no "points" That just means instead of paying a percentage of the loan amount to buy the rate down you're taking the "par" rate. The pricing right now if you did buy your rate down by 1 point is 4.375%.
If your lender isn't breaking this down for you upfront, you can't really trust them. In addition, if they aren't giving you the option to do this, you can't trust them.

I am learning so much about about points and interest. it's crazy. I just talked to the new lender, he gots me at 4.25%. so I am guessing that is good for my area, right? It's obviously way better than the last guy.

the new guy is waiting on his compliance department to send over the loan disclosure, and I soon i have that, i will be sharing them with you. He said it takes about 2 days.

Re: Fha interest at 5.25

JediNeo — Fri, 28 Apr 2017 19:11:46 GMT

@VALoanMaster wrote:
@JediNeo wrote:
@VALoanMaster wrote:
@JediNeo wrote:
If you look at box A (% of loan amount), there is no dollar amount for points, so you are getting some credit for your rate. Have you asked your LO what the next rate down looks like? Would you see be getting a credit, or would be paying (points) to have that lower rate?
Hi JediNeo,

Sorry but you're mistaken. Box A clearly lists an Origination Fee of $995 plus Processing & Underwriting Fees. What this means is the lender decided to break down their fees instead of charging 1% or more for an origination fee. When you look at it this way, the total amount the lender is charging is a little less than 1% of the loan amount so it "looks" like the OP is getting a good deal but it's not when you look at the rate. At 5.25%, there should be zero lender fees & a large credit towards the OP's closing costs.
My apologies, thank you for the correction
Wow, now that I've reread my response, it definitely come "out" the wrong way. I apologize.

No offense taken. I am glad you pointed it out so I now going foward. I just saw "points" and that equaled to paying down the rate in my head.

Re: Fha interest at 5.25

StartingOver10 — Fri, 28 Apr 2017 19:31:20 GMT

Personally, I am glad you are going to a new lender. 5.25% for a home that is a resale with no lender contribution is high.

I personally think the title fees were above market too - especially since you are relatively close to me, I'm in Palm Beach county, the other side of Fl.

The lender does not choose the title company. Take a look at your purchase and sale contract. Either the seller chooses (if they pay for it) or the buyer chooses - and then the buyer pays. Your contract will indicate who chooses and who pays. Speak to your Realtor.

Re: Fha interest at 5.25

girlonmission — Fri, 28 Apr 2017 20:02:25 GMT

@StartingOver10 wrote:
Personally, I am glad you are going to a new lender. 5.25% for a home that is a resale with no lender contribution is high.

I personally think the title fees were above market too - especially since you are relatively close to me, I'm in Palm Beach county, the other side of Fl.

The lender does not choose the title company. Take a look at your purchase and sale contract. Either the seller chooses (if they pay for it) or the buyer chooses - and then the buyer pays. Your contract will indicate who chooses and who pays. Speak to your Realtor.

Hi Neighbor,

I was in boca last week. My little cousin is looking into FAU. I have lots of of family in ft lauderdale and miami. In fact i just moved a year ago from Davie.

I am going to have my realtor look it.

my old LO came back with the following: Based on current market conditions, lowest available FHA rate is 4.50% with a 622 mid qualifying credit score. This rate/payment is $123 less per month.