This seems fishy!!!

[Rwil72]

Our low middle score is 650 and our DTI is 41% and the loan to value is right at 80% after the appraisal. The refinance quoted to me is 4.9% with me paying 1.75 points on a $344,000 which comes up to about 7,000.

The part that seems fishy beyond that is they are saying that’s the only option when I asked if my score is a little low why can’t I just pay a higher interest rate. I don’t want to sink 7k into a loan I’m going to get out of when my credit improves. The mortgage company is rocket mortgage. Also I wasn’t told about the 7k until after the appraisal, the initial estimate didn’t have any points paid quoted with the same rate.

[NC_Mtg_Loaner]

what do other lenders say?

Or did you just reach out to "Rocket Mortgage" and Quicken Loans because they are the largest mortgage lender in America?

[VALoanMaster]

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@Rwil72 wrote:
Our low middle score is 650 and our DTI is 41% and the loan to value is right at 80% after the appraisal. The refinance quoted to me is 4.9% with me paying 1.75 points on a $344,000 which comes up to about 7,000.

The part that seems fishy beyond that is they are saying that’s the only option when I asked if my score is a little low why can’t I just pay a higher interest rate. I don’t want to sink 7k into a loan I’m going to get out of when my credit improves. The mortgage company is rocket mortgage. Also I wasn’t told about the 7k until after the appraisal, the initial estimate didn’t have any points paid quoted with the same rate.

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Hi Rwil72,

I know it seems a little fishy but I'll give them the benefit of the doubt & here's why.

The interest rate/pricing is based on your credit score & loan to value. They (the lender) wouldn't know what your loan to value is until they get the appraisal back. That's why they updated your numbers once they had your appraised value.

That doesn't mean it's they only option you have though so I would check with another lender. For example: If you qualify for a Home Ready or Home Possible loan, your rate/pricing will be better based on what I'm looking at for rates.

Side note. If your plan is to refi now & the refinance again when your scores go up, you may want to consider this.

1) Every time you refinance, you add closing costs on to your loan. It most cases the closing costs run 3-6K depending on your taxes & insurance.

2) There is no way to know what rates are going to do tomorrow let a alone 6 - 12 months from now when you'd be ready to refi again.

So if you think you're going refinance again in the future to lower your rate, why not spend the money now to buy your rate down? 

[Rwil72]

They were the only ones I have applied with because I wanted a fast closing. I did call another mortgage broker and gave them the parameters 650 middle low score 80% equity and 41% DTI and he quoted me 4.5 -5%without any points. He stated If a person doesn’t want to pay any points their rate is just higher as long as the DTI will accommodate it. He couldn’t understand why I wasn’t presented that option.

[VALoanMaster]

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@Rwil72 wrote:
They were the only ones I have applied with because I wanted a fast closing. I did call another mortgage broker and gave them the parameters 650 middle low score 80% equity and 41% DTI and he quoted me 4.5 -5%without any points. He stated If a person doesn’t want to pay any points their rate is just higher as long as the DTI will accommodate it. He couldn’t understand why I wasn’t presented that option.

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what is your current rate & payment?

[Rwil72]

That makes sense,

[Rwil72]

It’s a construction loan, so I have to refinance to a permanent loan. My credit tank because I financed some upgrades on the house with my credit card and haven’t been able to pay it off yet .

[VALoanMaster]

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@Rwil72 wrote:
It’s a construction loan, so I have to refinance to a permanent loan. My credit tank because I financed some upgrades on the house with my credit card and haven’t been able to pay it off yet .

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That makes sense.

[CreditInspired]

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@Rwil72 wrote:
It’s a construction loan, so I have to refinance to a permanent loan. My credit tank because I financed some upgrades on the house with my credit card and haven’t been able to pay it off yet .

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If you had mentioned this first, we would have told you it did change the variable/terms for the loan you first applied for because your credit profile changed.

I am equally surprised that you weren’t told NOT to charge anything on CCs. That’s Mortgage Preapproval 101. Shame on your lender!

[Rwil72]

The lender who gave me the pre approval is not the same lender who I have the construction loan with. The preapproval without the points was given when the cards were high. The the appraisal came back and they said I had to pay $7k in points. The appraisal came in at 80%