4% interest rates

[buyhouse36]

Is anyone able to get a rate that low??? Right now USDA is quoting 4.875 but you cant buy down points. Our scores are in the mid-600's. But I would love to find a way to get the interest down to 4%. Any ideas??

[BrianB_The_Loan_Professor]

For a conventional loan a 15 at 4% is going to cost you about 2-3 points and a 30 yr at 4% about 4-5 points

This is just to buy down the rate

If you are set on that rate you may have to go to an ARM otherwise 4% is a little low without paying through the nose for it

FHA rates sheets that I am seeing dont even go that low on their fixed rate ratesheets

B

[Anonymous]

Where I live you have to come up with 2.25pts just to get a 4.875 rate

[BrianB_The_Loan_Professor]

Rates have a lot of variables and I am guessing that for that cost you live in an area where homes are less expensive?

Most agents will base their margin of profit on what it costs to do the loan (break even) plus the amount needed to make a living (pay the bills and feed the family) of course others will try to make as much as possible but thats a different story

so when they do this say the amount needed to be made is a window of $3k -$4k per transaction

They then have to price accordingly as a 100k loan costs the same as a 400k loan and it also takes the same amount of time

So a 100k loan may mean 3-4 points through up front fees and YSP where a 400k loan would simply be 1 point

all this to say generally speaking of course a larger loan amount will be easier to get a lower rate on most of the time

B

[WannaHouse]

I would be happy with that rate. Last May, the best we got was 5.25 and they were low then.

[taun]

It's helpful to know too what kind of loan you're interested in.  15, 20, 30 year fixed conventional?  I'd say 4.875% mentioned is great, especially with no points.  I'd jump on that, but that just me.

When we originally got our loan, we were at 5.875% fixed/30 years.  We refinanced back in December with Penfed when the rate got to 4.75% and I'm glad we did because they've gone back up again.  Anyhow, they had a 1% origination fee, but most banks charge you 1 point anyhow. 

[marty56]

I got 4 % for a  5 year fixed refi from my CU back in June.  I think they are offering 4.25% for a 10 year note.   No points and under 1k closing costs as well.  RBFCU In San Antonio.  CU's rule!

Message Edited by marty56 on 02-12-2010 02:47 PM

[buyhouse36]

Thanks for all the responses!

We currently are getting 4.875%. BUT....

Our purchase price is $116K. Then we are paying $6K in fees and closing costs. So at this point our total amount is $122,400. We are doing USDA which is 100%. So we dont have to put any money down but we might. Im just unhappy with all the fees. We get the best interest rate for our credit scores with USDA but there are a lot of fees. If we go with a different loan product, the interest rates goes up.

[Anonymous]

As dallas would say....

You can't have your cake and eat it to....

You can not do a zero down zero closing costs paid loan and not expect the fees to be higher period.  There has to be some margin for profit for the bank, money to pay the real costs with doing and servicing the loan, and margin to cover losses on the loans that go bad.  If you are getting a zero cost 30 year fixed loan at 4.875% and less than 6% closing costs (which are rolled in and only a portion of those are bank fees) then what more can you ask for....  If you have some extra cash, use it to bolster reserves, bolster retirement monies, fo any upgrades needed on the house (wisely of course), or just pay some extra on the principle (set up bi-weekly pay and pay some extra to get the loan paid off much quicker, etc)

[Anonymous]

Also to clarify, 6K in fees and total closing costs for a 116K loan is pretty low I think.  I have seen 100K loans that the closing costs were closer to 10K.  There are alot of variables, but in general those numbers do not sound that bad.