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3.375% interest seem unrealistic?

Its_Me
Regular Contributor

3.375% interest seem unrealistic?

Sorry for repeating some of this info from a previous post. Just wanted to provide background info for those who may not have read.

 

I was preapproved for a 30 year fixed FHA loan through the credit union for 3.375%. About a week later, I was preapproved for 30 year fixed FHA from PrimeLending for 4%. Neither loan included lender assistance. When I asked LO from PrimeLending for GFE, he said he coudn't give it me because he does not have the preliminary HUD from the title company. He said interest rate is 4% I explained that I CU gave me GFE with 3.375%. He responded "Not sure how anyone could offer 3.375%." And basically I need to make a decision and let him know because he has already spent a lot of time to get me to this point. Not sure what he means by that.

 

So he has emailed a couple times this past week, asking is there was anything he could do. Do I need a preapproval letter for a specific house, etc. I emailed him today and let him know I would be going with the CU because the interest is 3.375%. I do realize that interest rates have gone up a bit but I applied with him one week after the credit union application and I know for a fact that their rate was still  3.375% when he quoted me 4%

 

Here is his response:

 

"There is absolutely zero chance someone can get you 3.375% on a 30 year fixed mortgage loan at this point. The market is nowhere near this pricing. I would be very cautious proceeding. Even feel free to send me your offer and I will review for you. I do business the right way."

 

I guess my question is, should I be leery of this credit union? Not that it makes any difference, but this credit union is right on the college campus I work at that just happens to be one of the largest public universities in the country. They service a lot of employees and students.

 

What should I make of this? It looks like from the credit union's website that their 30 year FHA loan has gone up a quarter of a percent just a couple days ago. When interest rates rise, do most lender's raise their rates accordingly?

 

Thanks - just a little put off by his comment. I was kind of cautious proceeding with someone that could not provide me a Truth in Lending within 3 days of applying.

 

 

Message 1 of 29
28 REPLIES 28
TortoiseWins
Senior Contributor

Re: 3.375% interest seem unrealistic?

I could only see that rate if it's accompanied by a ridiculous amount of points. 

 

Message 2 of 29
StartingOver10
Moderator Emerita

Re: 3.375% interest seem unrealistic?

From your other thread the current CU rate is 3.675 (or there abouts) and it is reasonable without a lot of points. PrimeLending IME is always on the high side. So until you get a contract, you won't be able to lock the rate. What is the CU name? Have you checked reviews on recent closings with this CU?

Message 3 of 29
Marlena
New Contributor

Re: 3.375% interest seem unrealistic?

Should you be leery of the CU? Yes. Should you be leery of PrimeLending? Yes. You should be leery of everybody until you get a GFE on an actual property. I know CU is talking 3.375% but what have they said about actual APR? Probably not much at this point because you need a GFE to truly understand how much your loan is costing you.

 

I wouldn't put much energy into dwelling on the the interest rate/APR guesses (which is what they are at this point) right now. Get a GFE from both lenders once you have a settlement agreement in place, then compare them side by side. That is when you will know the actual interest rate and APR being offered from both lenders. What they are quoting now has no real meaning in the grand scheme of things.

 

Personally, I do think the PrimeLending guy is being more realistic in his estimate at this point than the CU is.

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Message 4 of 29
Its_Me
Regular Contributor

Re: 3.375% interest seem unrealistic?


@StartingOver10 wrote:

From your other thread the current CU rate is 3.675 (or there abouts) and it is reasonable without a lot of points. PrimeLending IME is always on the high side. So until you get a contract, you won't be able to lock the rate. What is the CU name? Have you checked reviews on recent closings with this CU?


My messages got caught in a spam filter or something but I thought my computer had crashed before posting - sorry for the repeated info.

 

Credit Union of Ohio. I don't know a lot about them other than they are right on the property of the public university I work for, I imagine they have many clients because the university employees ~30,000 employees and has close to 60,000 students.  

 

I thought the rate was reasonable given it was quoted over a week ago. I have also heard elsewhere that PrimeLending was on the high side.

Message 5 of 29
Its_Me
Regular Contributor

Re: 3.375% interest seem unrealistic?

Thanks for your input Marlena. I'll have to dig my paperwork out - the CU did provide a GFE and a Truth-in-Lending statement. An APR was included. I know it was on the preapproval letter too. They did not use an exact address (just the city), but we used a max price of $160,000. I provided the home owners insurance costs that I have quotes on from a couple insurance companies. I also looked up property taxes on a several homes to get an idea on that as well. 

 

Since rates have gone up, I'm curious how much PrimeLending's 4% has increased over the last week.

Message 6 of 29
Marlena
New Contributor

Re: 3.375% interest seem unrealistic?

I'm confused. When I went to Credit Union of Ohio website and clicked on "Mortgages" I was forwarded to a third party site called "mycumortgage", with the disclaimer that I was being forwarded to a third party site and Credit Union of Ohio was not responsible for the content, format or information of the third party site...? Anyway, I played along and it asked me to choose my credit union, so I chose Credit Union of Ohio and filled out the information requested.  I was given a quote for a 30 yr FHA interest rate of 3.75% and an APR of 4.601% for a $150,000 FHA with 10% down. Closing costs $4886. I told it I had "good credit" because it forced me to choose a category from the dropbox.

 

Why does Credit Union of Ohio forward you to a third party site when you click on "Mortgages"?

Experian 786, Equifax 799, TU 786 (4/15)
Experian 786, Equifax 791, TU 786 (5/15) EQ dinged 8 pts for HP from Discover App

Trying to hit 800! Just because.
Message 7 of 29
StartingOver10
Moderator Emerita

Re: 3.375% interest seem unrealistic?

The others do have a point - the interest rate doesn't stand on its own. You need to compare the rate with the associated costs to get that rate. It is difficult if not impossible to compare the rates and costs without a written estimate. And really since the rate floats until you have a property it is just preliminary. But the attitude of the LO comes out - it is important to provide a written estimate (call it a worksheet). If the LO is hesitant at all to provide in writing what he is saying verbally, then that tells you there are going to be issues down the road IMO. I see differences all the time between lenders in costs and rate. You have to have the whole quote in writing to compare.

Message 8 of 29
Its_Me
Regular Contributor

Re: 3.375% interest seem unrealistic?


@Marlena wrote:

I'm confused. When I went to Credit Union of Ohio website and clicked on "Mortgages" I was forwarded to a third party site called "mycumortgage", with the disclaimer that I was being forwarded to a third party site and Credit Union of Ohio was not responsible for the content, format or information of the third party site...? Anyway, I played along and it asked me to choose my credit union, so I chose Credit Union of Ohio and filled out the information requested.  I was given a quote for a 30 yr FHA interest rate of 3.75% and an APR of 4.601% for a $150,000 FHA with 10% down. Closing costs $4886. I told it I had "good credit" because it forced me to choose a category from the dropbox.

 

Why does Credit Union of Ohio forward you to a third party site when you click on "Mortgages"?


I don't know the answer to that but I know what you are talking about. It takes you to a "loan consultant" page. The LO officer I have been dealing with is from Credit Union of Ohio though and all the paperwork I have is from there too. I'd post a snap shot of some of the documents but I'm not sure how to do that on here. 

 

I haven't tried selecting any of the other credit unions. Maybe I'll try that.

Message 9 of 29
Marlena
New Contributor

Re: 3.375% interest seem unrealistic?

OK, dug some more and found out that mycumortgage is the actual mortgage lender. They are owned by Wright-Patt Credit Union. Basically looks like a bunch of credit unions partnered together under the umbrella of mycumortgage in order to be able to offer more loan products to their members (credit unions don't have all the money in the world like the big banks do). You apply through your credit union, but mycumortgage processes, underwrites, services and funds the loans. Credit Union is the middleman. The actual interest rate and APR is determined by mycumortgage, not the credit union.

Experian 786, Equifax 799, TU 786 (4/15)
Experian 786, Equifax 791, TU 786 (5/15) EQ dinged 8 pts for HP from Discover App

Trying to hit 800! Just because.
Message 10 of 29
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