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Old 04-17-2015, 11:49 AM
 
Location: Mount Laurel
4,146 posts, read 8,382,146 times
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Quote:
Originally Posted by Modification Specialist View Post
Falcon is on point!!!

You can't judge a rate without knowing all the information behind it.
  • If OP is planning to live in the property for a long time. It is better to show closing costs for a lower interest rate. Over lifetime of loan - less is paid in interest.
  • If OP is planning on living in the property short term. Then it is better to roll points (costs) into the interest rate. Over to lifetime of loan - more is paid in interest.
but you can judge rate comparing what the average is for 30 years rate. With your two scenarios, we can start to get into other mortgage options vs 30 years.
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Old 04-17-2015, 01:22 PM
 
15 posts, read 16,512 times
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I locked my rate for a conventional at the end of March. I had ok DTI/Credit and with 0 points I got 3.625. I know its not helpful, but when getting quotes my local credit union was always a little bit lower. (Not much, but hey every $ counts)
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Old 04-17-2015, 11:31 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129
Quote:
Originally Posted by Saory View Post
Hi,
I'm about to lock my interest rate for a home loan of 198K - 30 Years, in Houston, TX.
It will be at 4.25% with 0 points.

Do anybody know what "0 points" means?
and, does this seem like a good rate?
Unless you post your credit score, downpayment, source of income, credit history, type of property, assets, their isn't enough information.

Points are talked about in two manners. By definition 1 point is 1% of the loan. Points are also referred to as "Discount Points" where you pay to possibly reduce your interest rate. You can pay various amount and is not restricted to just 1%. There are some tax strategies in paying discount points in the purchase.
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Old 04-17-2015, 11:43 PM
 
2,409 posts, read 2,489,978 times
Reputation: 1807
Quote:
Originally Posted by FalconheadWest View Post
It's not just about credit, it's about down payments. The par rates are for borrowers with stellar credit AND a large down payment. If he's only putting down 3 or 5%, then 4.25% is probably a very good rate, especially with 0 points.

You can't judge a rate without knowing all the information behind it. And comparing a rate in February to today's rate is ridiculous as rates change daily (except at credit unions).
A smaller down payment does not result in a 0.5% penalty. There must be something else. FICO scores for example.
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Old 04-17-2015, 11:58 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
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Quote:
Originally Posted by AmFest View Post
A smaller down payment does not result in a 0.5% penalty. There must be something else. FICO scores for example.
A smaller down payment can have a significant impact on rate especially if you go from 20% down to 19% down.
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Old 04-18-2015, 07:22 AM
 
2,409 posts, read 2,489,978 times
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Quote:
Originally Posted by thelopez2 View Post
A smaller down payment can have a significant impact on rate especially if you go from 20% down to 19% down.
By how many basis points?

Was 0 for me when I asked.
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Old 04-18-2015, 08:59 AM
 
Location: Southern California
4,350 posts, read 4,933,884 times
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Quote:
Originally Posted by AmFest View Post
By how many basis points?

Was 0 for me when I asked.
While some places won't charge extra for less than 20% down, most will give you a higher rate to cover a lender paid PMI cost. Credit score also will give you 1/8 hits on the rate here and there. After the hits of 1/8 here and there you can easily get beat up for a rate of .5 above those advertise rates.

Open company doing business in California use to advertise in fine print +x% for each self employed borrower, +y% for scores under 760, +z% for LTV below 75%, . As rates increase they change the fine print from 75% down to 70%, down to 60% and kept the "GET a X.X% mortgage now" the same.
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Old 04-19-2015, 09:30 AM
 
12,404 posts, read 9,203,248 times
Reputation: 8863
Quote:
Originally Posted by thelopez2 View Post
A smaller down payment can have a significant impact on rate especially if you go from 20% down to 19% down.
If this is so, then put down 20% by getting the extra 1% from a credit card. You would actually pay less interest overall.
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Old 04-19-2015, 02:24 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129
Quote:
Originally Posted by ncole1 View Post
If this is so, then put down 20% by getting the extra 1% from a credit card. You would actually pay less interest overall.
You missed the whole point. The point was there are certain threshold that cause rate hits, a significant is the 20% down, the issue isn't how to get to 20% down.

Using the 1% on your credit card when close to closing is an incredibly poor decision.
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Old 04-19-2015, 04:02 PM
 
12,404 posts, read 9,203,248 times
Reputation: 8863
Quote:
Originally Posted by thelopez2 View Post
You missed the whole point. The point was there are certain threshold that cause rate hits, a significant is the 20% down, the issue isn't how to get to 20% down.
Ok.


Quote:
Originally Posted by thelopez2 View Post
Using the 1% on your credit card when close to closing is an incredibly poor decision.
Why, if it would save you money and your utilization and DTI wouldn't be too high?
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