Interest Rate for Cash Out Refinance

dragonfly66 · ‎03-04-2020

Hi, Everyone. I'm hoping the mortgage experts on here can help me. I'm doing a cash out refinance of my home to consolidate some debt and I'm being offered an interest rate of 4.125%. My middle FICO mortgage score is 746. I was talking with two co-workers who are also refinancing their homes, although they aren't doing a cash out. One is getting 3.125% and the other is getting 2.8%. The one getting the 2.8% confirmed that he wasn't buying down the rate in order to get it that low, so I don't understand why I'm getting a higher rate.

Could it be because I am getting cash out? Would that affect the interest rate?

Also do you think it would make that big of a difference if my middle mortgage score was 760?

I think a 746 middle mortgage score is pretty strong based on what I've read on this forum, so I'm just trying to understand why my interest rate isn't lower, given the fact that rates are falling. Any insight would be helpful.

Current - FICO 3/2019: EX(753); EQ(763); TU(749)
Beginning - FICO 7/2014: EX(630); EQ(608); TU(581)
Credit: Wells Fargo Home Projects Charge Card ($7,800); Wells Fargo Home Rebate Visa ($4,000); Capital One Quicksilver ($10,000); Capital One Venture ($6,000); Discover it ($7,900); Macy's ($20,000); BrandsMart ($4,000); Banana Republic ($1,200); Lowes ($12,000); Amex Everyday ($30,000); Macy's Amex ($15,000); Amex Platinum (NPSL); Citi Diamond Preferred ($9,000); Chase Freedom ($9,000); Wells Fargo Outdoor Solutions ($10,000); SunTrust HELOC ($25,000)

Revelate · ‎03-04-2020

Yup it adds to the interest rate.

From the Fannie LLPA:

Who was the lender for the 2.8% and what closing costs? Sometimes lenders (like DCU used to at least in their rate calculator) don't explicitly state that they are buying down points but then you see a super low APR with 14k in closing costs or whatever.

dragonfly66 · ‎03-05-2020

Thanks, Revelate. That puts my mind at ease. Based on that chart, if I wasn't doing a cash out I would have had about a 3.25% interest rate.

Current - FICO 3/2019: EX(753); EQ(763); TU(749)
Beginning - FICO 7/2014: EX(630); EQ(608); TU(581)
Credit: Wells Fargo Home Projects Charge Card ($7,800); Wells Fargo Home Rebate Visa ($4,000); Capital One Quicksilver ($10,000); Capital One Venture ($6,000); Discover it ($7,900); Macy's ($20,000); BrandsMart ($4,000); Banana Republic ($1,200); Lowes ($12,000); Amex Everyday ($30,000); Macy's Amex ($15,000); Amex Platinum (NPSL); Citi Diamond Preferred ($9,000); Chase Freedom ($9,000); Wells Fargo Outdoor Solutions ($10,000); SunTrust HELOC ($25,000)