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Old 10-07-2010, 08:21 AM
 
Location: West Orange, NJ
12,545 posts, read 18,430,065 times
Reputation: 3689

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OK smart people on CD, here's a question:

I have a home I purchased in March, 2010. Price was $445,000. I put 10% down, so had a mortgage of $405,000 at 4.875% interest. I paid 1 point to get that rate which was 1/4 point savings over the standard rates offered at the time.

Now, a broker i dealt with in shopping for a mortgage but didn't end up going with in the end is offering me two options:

3.875% with estimated closing costs of $3,000 plus my escrows.
3.99% with a $2,500 credit towards the estimated closing costs of $3,000 plus my escrows.

Now, it seems like a no brainer to do this, which is why I'm hesitant. I'll get my escrows back from current lender, so that should be close to a wash right? Is it dangerous to think that the only money out of pocket would be the $3,000 in choice 1 or the $500 in choice 2, plus if the new lender requires me to prepay more taxes, maybe slightly higher escrows with new lender?
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Old 10-07-2010, 08:30 AM
 
Location: Austin
7,192 posts, read 17,775,034 times
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It sounds like a 15 year instead of a 30 year... there aren't any 30 year fixed rates that are below 4% right now...
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Old 10-07-2010, 08:32 AM
 
Location: West Orange, NJ
12,545 posts, read 18,430,065 times
Reputation: 3689
updated email this morning:

3.99 with full $3,000 credit
3.875 with $1,000 credit


and it's a 30 year. sorry i didn't clarify.
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Old 10-07-2010, 08:56 AM
 
Location: Plano, Texas
1,676 posts, read 6,466,610 times
Reputation: 686
what are you waiting for? Jump on it now.
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Old 10-07-2010, 09:02 AM
 
Location: West Orange, NJ
12,545 posts, read 18,430,065 times
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victor - i'm hesistant because it sounds too good to be true.

I think i'm going to do 3.99% with closing costs credited. i don't think it's worth $2k out my pocket to get another 1/8 point.
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Old 10-07-2010, 09:14 AM
 
Location: Plano, Texas
1,676 posts, read 6,466,610 times
Reputation: 686
I agree, the 3.99 is a better option. Several lenders offering below 4% today for 30 year fixed. Make sure you get the broker to lock today. We get the Employment Situation report tomorrow which can impact rates in a big way. Today's rate sheets are the best that i have ever seen, been in business for 10 years.
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Old 10-07-2010, 09:24 AM
 
Location: Austin
7,192 posts, read 17,775,034 times
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Quote:
Originally Posted by VictorBurek View Post
Several lenders offering below 4% today for 30 year fixed.
Today? Cuz they weren't yesterday, and the lenders I work with aren't below 4% today... sounds too good to be true, especially with the lender paying the closing costs.
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Old 10-07-2010, 09:26 AM
 
Location: Austin
7,192 posts, read 17,775,034 times
Reputation: 9776
Victor, just saw your last thread... you said 20% for the below 4% rates. THe OP stated he only has 10% when he bought... That's why I don't see how his rate could be below 4% without having more of a down payment.
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Old 10-07-2010, 09:30 AM
 
Location: Plano, Texas
1,676 posts, read 6,466,610 times
Reputation: 686
Still possible. it would be a skinny loan for the originator. And, can still get it with 10% equity but of course there will be PMI.
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Old 10-07-2010, 09:34 AM
 
Location: West Orange, NJ
12,545 posts, read 18,430,065 times
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yes my pmi is $180/month. won't change. i plan on eliminating it after 2 years either way. my brother in law is a financial adviser and ran the numbers, he said do 3.875% the breakeven point between the 2 is 27 months.
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