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Old 11-28-2013, 04:01 PM
 
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Ok… I see the difference between interest rate and APR

Interest rate is national prime interest rate, while APR is basically Mortgage Interest rate + fees points rate + credit cost rate+ mortgage insurance rate –discount rate – federal subsidy rate
which could be higher or lower compared to Prime interest rate…

For example, as per following links currently, 30 year fixed mortgage interest rate is about 4.29 % to 4.47%

Current Mortgage Interest Rates | Bankrate.com
Mortgage Rates - Today's Home Loan Rates and Trends | Zillow
Primary Mortgage Market Survey (PMMS) - Freddie Mac
Mortgages, student loans, car financing and CD rates at CNNMoney.com
Mortgage Rates and Market Data
Mortgage Rates - Current Home Loan Rates and Mortgage Calculator
https://www.usbank.com/cgi_w/cfm/per...rest_rates.cfm

The APR could be higher or lower depending on down payment, credit score, federal subsidy to state, relationship with bank etc.,

Leave alone APR, I am wondering why every site has a different interest rate for the same type of product (30 year fixed mortgage)
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Old 11-28-2013, 04:04 PM
 
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Nice pointer that describes the steps on understanding/getting good interest rates

Mortgage Rates Today, Current Mortgage Rates at HSH.com
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Old 11-28-2013, 04:06 PM
 
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As per the following link:
https://www.discover.com/home-loans/...ortgage-rates/

30 yr fixed conventional interest rate is 4.375%, while its APR is 4.605%
Whereas 30 year fixed FHA is 3.75% and its APR is 5.373%...
I am wondering if taking 30 year FHA loan and putting 20% down payment would reduce the APR compared to taking 30 year fixed loan and putting 20% down payment
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Old 11-28-2013, 05:40 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
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Quote:
Originally Posted by spalam01 View Post
As per the following link:
https://www.discover.com/home-loans/...ortgage-rates/

30 yr fixed conventional interest rate is 4.375%, while its APR is 4.605%
Whereas 30 year fixed FHA is 3.75% and its APR is 5.373%...
I am wondering if taking 30 year FHA loan and putting 20% down payment would reduce the APR compared to taking 30 year fixed loan and putting 20% down payment
On similar product terms FHA will cost you more in the long run. Regardless of LTV FHA will start with mortgage insurance, even if you have 30% down. Where did you get that definition of interest rate versus APR. At least you have months to figure all of this out.

By the way do you have any contract with the builder?
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Old 11-28-2013, 09:26 PM
 
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Quote:
Originally Posted by thelopez2 View Post
On similar product terms FHA will cost you more in the long run. Regardless of LTV FHA will start with mortgage insurance, even if you have 30% down. Where did you get that definition of interest rate versus APR. At least you have months to figure all of this out.

By the way do you have any contract with the builder?
I have not signed the contract with the builder yet.

Actually I am going through the contract now, which I am planning to sign in a day or two.

The FINANCING paragraph of the contract says
"
(I). Within 15 calendar days from the effective date of the agreement, purchaser shall complete and submit to the lender(s) of purchaser's choosing, a mortgage loan application and all information reasonably requested by such lender, shall otherwise complete such application in good faith, and shall pay the required application fees and execute all documents necessary to initiate the loan process and

(II) Within 45 calendar days from the effective date of this agreement, purchaser shall notify seller in writing as follows:
a. Purchaser has obtained a binding commitment letter from a lender of Purchaser's choosing which provides that the lender has submitted the Purchaser's application to its underwriting department, that the lender's underwriting department has approved the Purchaser's application, and the lender has agreed to make the loan as more particularly described above (hereinafter referred to as loan commitment letter") in which case, Purchaser shall provide the Commitment letter to Seller for its review along with the aforementioned written notice or
b. Purchaser has been denied financing and desires a cancellation of the Agreement and refund of the Deposit."


Looks like in next 15 days I need to decide upon a lender and submit the loan application and in next 45 days I need to get the loan approval letter from the lender.

However, the builder mentioned that it would take about 5 to 6 months to close.

Would this mean that I am stuck with the lender that I need to decide upon in next 15 days and that I need to lock the rate for 4 to 5 months.

Thanks!
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Old 11-28-2013, 11:35 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
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Are you working with a real estate agent or broker?
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Old 11-28-2013, 11:49 PM
 
580 posts, read 1,247,498 times
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Quote:
Originally Posted by thelopez2 View Post
Are you working with a real estate agent or broker?
Yes. I am working with real estate agent. Please advice is there anything I need to talk to my real estate agent before I sign the contract with the builder
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Old 11-29-2013, 02:23 PM
 
580 posts, read 1,247,498 times
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1. Would it be fine, during the time of closing, if I can go with a different lender compared to one who gives the "binding commitment letter"?

2. Also is it ok to get "binding commitment letter" from many lenders

3. Can I count the prepayment (say 5% of the total price), I make to start the construction as part of down payment with the lender (meaning that I will pay cash of additional 15% at the time of closing to make it a total of 20% down payment for the loan) during the time of closing.

Thanks!
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Old 11-30-2013, 03:41 PM
 
3,318 posts, read 7,255,247 times
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Quote:
Originally Posted by spalam01 View Post
1. Would it be fine, during the time of closing, if I can go with a different lender compared to one who gives the "binding commitment letter"?

2. Also is it ok to get "binding commitment letter" from many lenders

3. Can I count the prepayment (say 5% of the total price), I make to start the construction as part of down payment with the lender (meaning that I will pay cash of additional 15% at the time of closing to make it a total of 20% down payment for the loan) during the time of closing.

Thanks!
You are going to annoy the living **** out of your lender, and I would bet my life on the fact that you jump to a different one after the first one does all the heavy lifting.
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Old 12-01-2013, 05:58 PM
 
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Quote:
Originally Posted by Pfhtex View Post
You are going to annoy the living **** out of your lender, and I would bet my life on the fact that you jump to a different one after the first one does all the heavy lifting.
If it is legal, what is wrong in shopping for a good deal.
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