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Fha interest at 5.25

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girlonmission
Valued Member

Fha interest at 5.25

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
29 REPLIES 29
Anonymous
Not applicable

Re: Fha interest at 5.25

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.
Message 2 of 30
Anonymous
Not applicable

Re: Fha interest at 5.25

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.

Message 3 of 30
StartingOver10
Moderator Emerita

Re: Fha interest at 5.25


@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. 

 

 

Message 4 of 30
CreditWarrior21
Regular Contributor

Re: Fha interest at 5.25

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!

Message 5 of 30
girlonmission
Valued Member

Re: Fha interest at 5.25

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 : 8042closing details.JPG

Message 6 of 30
JediNeo
Frequent Contributor

Re: Fha interest at 5.25

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?

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Message 7 of 30
StartingOver10
Moderator Emerita

Re: Fha interest at 5.25

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?

 

 

Message 8 of 30
DallasLoanGuy
Super Contributor

Re: Fha interest at 5.25


@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

 

 

Retired Lender
Message 9 of 30
girlonmission
Valued Member

Re: Fha interest at 5.25


@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. 

Message 10 of 30
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