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Old 04-06-2015, 01:24 PM
 
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Found the house, now we need to find the loan. We were offered 3.875% doing a 5% down conventional mortgage with .5% toward closing costs (about $1500). Are closing credits worth it? Is this a good rate?
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Old 04-06-2015, 08:52 PM
 
Location: MID ATLANTIC
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Yes, it's a decent rate, provided the lock period is what you need. Other considerations include lender fees (it doesn't do any good to get a 50 credit if their fees are substantially high) and mortgage insurance rate. (Did you know credit union mortgage insurance fees are anywhere from 15% th 30% cheaper than a bank)?

Chances are, you're fine.
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Old 04-07-2015, 08:16 AM
 
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Quote:
Originally Posted by Smooth23 View Post
Found the house, now we need to find the loan. We were offered 3.875% doing a 5% down conventional mortgage with .5% toward closing costs (about $1500). Are closing credits worth it? Is this a good rate?
I'm assuming by closing credits you mean where you take a higher rate to have the lender pay some of your closing costs. It's a relatively simple math formula. Figure out how much more in interest you'll pay over the time you live in the house, compare that to the credit you're getting. Take the one that's a better deal.

Problem is that the "simple math formula" requires you to know how long you'll be in your house for. If you stay 30 years, the lower rate is better. If you stay 3 years, the credit is probably better. Since you're probably somewhere in between, it becomes a judgement call.
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Old 04-08-2015, 06:55 AM
 
2,409 posts, read 2,489,978 times
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Quote:
Originally Posted by Smooth23 View Post
Found the house, now we need to find the loan. We were offered 3.875% doing a 5% down conventional mortgage with .5% toward closing costs (about $1500). Are closing credits worth it? Is this a good rate?
The rate is okay. If you have an excellent credit score, you probably can do better. Go to zillow.com to see what interest rate is commonly offered.
Closing cost credit is a great deal as it reduces upfront burden.
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