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4.7 interest rate with a 702 credit score!!???

Established Contributor

Re: 4.7 interest rate with a 702 credit score!!???


wrote:

This sucks! I am doing a new construction as well - when i was preapproved in November 2017 with a 783 mid score, my rates were quoted at 3.75% - 4%....now watching them rise as a wait to do a rate lock for end of April close date is nerve wrecking....

Does anyone have pros/cons of maybe doing an ARM and then refi before the initial period is up? In my novice mortgage brain, I see at least being able to get a lower rate to start and then refi when rates get better????


NEVER EVER play with your home like you're betting on the stock market. You can be in an ARM if you don't plan to live there that long, 10 year ARM at the latest, but rates are still below 5%. Stick with it.

Mortgage Loan Officer in Greater Chicago Area plus 49 states
Message 11 of 27
Frequent Contributor

Re: 4.7 interest rate with a 702 credit score!!???

We were pre-approved back in June 2017 and the rate then was 3.87% Our new home was suppose to be started in Oct 2017 but didn't break ground until Dec 1 2017, Original close date was Feb 14th then it has been moved to April 30th and now it will be moved again to close sooner but no date has been given yet. The rates today for us are at 4.37% now and because my hubby's middle score is lower then mine we have to use his Smiley Sad Without knowing when the new house will be finished, we can't lock in a rate because they are only good for 60 days unless we want to pay $$ to keep it locked for an additional month. I am not willing to do that. We are doing USDA.I hate the changes in the rates right now.

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Message 12 of 27
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Established Member

Re: 4.7 interest rate with a 702 credit score!!???

I guess I shouldn't feel too bad about the 4.875% we locked at the end of Jan with a 661, sounds like they will only be going up...

Message 13 of 27
Established Member

Re: 4.7 interest rate with a 702 credit score!!???

My wife and I are very bummed about the interest rates as well. Right now our credit union has 30yr mortgages at 4.375 (and has been holding steady all of February) but we don't go in to get pre-approved until March 2nd.. my middle number is 729 and wifes is 768. Hoping we can lock in at or under 4.5 by the time we find a house and close!
Message 14 of 27
Established Contributor

Re: 4.7 interest rate with a 702 credit score!!???

Don't know if this will make you feel any better. Current rates are still historically low. During the winter of 1981 a 30yr mortgage rate was over 18%. 😲
Message 15 of 27
New Member

Re: 4.7 interest rate with a 702 credit score!!???

Hi All,

I've been searching all day for a thread like this.

The rising rates are killing me and I'm feeling like I'm going to get priced out of my home.

Pre-Approved in May 2017 for brand new home $218K (VA Loan), annual income 42K

When the builder's lender did the Good Faith Estimate in June, rate estimate was 3.875% and my estimated payment was around $1250

 

The house was supposed to be near finished by the end of 2017 but here we are in March and it's still a few weeks from completion. The delays have resulted in me getting thrusted into this rate/bond increase garbage. Builder was also hedging so they wouldn't give me confirmation that I was well within 60 days of closing until about a week ago so wasn't able to look at locking. I checked today and my lender quoted VA 30yr Fixed at 4.875%! I knew it had risen but I didn't think it had gotten that high considering the increases and what I saw from other sites as the averages for the conventional loans. And my credit scores are 741,753, and 761. With taxes and insurance, that rate is going to push my payment close to or over $1400 which has me very worried that it will get dinged in underwriting because I have 1 Auto Loan (only other debt) that will push my DTI over 50%. (back in 2015 I had to trade in my car but my last car had been paid off for years and I didn't have any other credit history so got hit with a horrible rate, refinanced a year later after getting/using a credit card and my scores shot up into the mid 700's but still paying for that mistake since I should have gotten the credit card first). I went and tried to get a second opinion with another lender that quoted me 4.625% which seems closer to the averages being reported, but I'd have to bring more money to closing that the builder would pay if I use their preferred lender. 

 

Like some of you I'm frustrated because I don't know what to do. If you aren't closing until later this year, I'd be really worried. Last year very rarely checked rates. Hard to believe in the last 60 days my interest cost will have increased $46,000 over the loan life. I wish my loan officer had warned me sooner, I might have just laid the money down to lock early. I never thought I was going to see above 4.5%. If I am getting quoted 4.875% I'm guessing every other conventional loan is already over 5%?

Message 16 of 27
Frequent Contributor

Re: 4.7 interest rate with a 702 credit score!!???

Since late November, the barometer for mortgage rates in the US--the US 10 YR Treasury Bond Yield--has been rising and has reached a four year high.    This interest rate escalation and any future hikes has been anticipated as well as expected ever since Janet Yellen took office early in the Obama administration because the majority of economists have agreed and concluded that economic prosperity and growth is dependent upon higher rates.   With this being said, the Federal Reserve is anticipating at least 3 and possibly 4 rate hikes this year to the overnight rate they charge banks.   While this doesn't immediately impact mortgage rates it does facilitate an economic climate that's preparing for higher mortgage rates in the longer term.   

 

Yet the US 10 YR TBY is meeting resistance at this current level so you might watch to see if it breaks out above 3.0% and if so you might see rates stabilize between the 5 and 6% range.  It's possible that the bond's yield has moved too far too fast and you might see relief in what rates your lender is looking to lock if the 10 YR slides back down below 2.75% (look for a floor of 2.65%) but there is a ton of positive economic incentives in place to spur economic growth but that 10 yr. yield of ours is struggling at the 2.9% level if you've been watching the volatility in the marketplace.  

 

Now you might want to shop around with other lenders to see who has what to offer because I see VA loan rates lower than what your being told (at least in my area) so I wonder what type of incentives you could be losing if you switch lenders now for a lower rate, but I'd get a comparable quote.   If you went with the builder's preferred lender then that might make sense that you are paying a slightly higher rate in order to get X amount of closing costs paid by the builder.  

 

Hang in there and good luck!

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 17 of 27
Established Contributor

Re: 4.7 interest rate with a 702 credit score!!???

I was making loans back then. We didn’t write 30 yr fixed at 18% instead the ARM was invented with a Buy Down to 12% for 2 or 3 yrs and after that???? Scary times....
Message 18 of 27
Established Contributor

Re: 4.7 interest rate with a 702 credit score!!???

“Over the life of the Loan” you will never be there 30 yrs OR you will certainly not have THAT particular loan for 30 yrs. Average is 5 to 7 yrs before a homeowner Refinaces or sells the house.
Unfortunately when you build a home you are at “rate risk” for 4 to 6 months or longer. Not all borrowers should take that risk or can afford to take the risk.
Message 19 of 27
Established Member

Re: 4.7 interest rate with a 702 credit score!!???

Ugh I hear you. We are getting ready to go for a mortgage in the next month or so and I’m so worried our rate is going to price us out of the range I want to be in. When we bought our first home in 2001, we had like 6% BUT the houses were a lot cheaper then also.
Mid scores will probably be around 650 when we go for our mortgage and I’m so stressed about getting some absurdly high rate. I debated doing ARM for now and then refinancing once our scores improve but that options scares me too I mean what if rates go really high and I could lock in now at say , 5% ya know? So stressful.
We are doing a VA loan.
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Message 20 of 27