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I just closed escrow for an FHA in LA Rate 6.75%
670 and 680 or so credit score, 1 point over a 220000 Loan.
My broker has been telling me all the way that he didn't lock the rate so he could get a better rate, Our initial conversation two months ago where that the rates would be 6.3 or so...
The 6.75 figure kept showing in every paper but I was told that it was just a number that did not mean the rate at closing.
Last day, signing day 6.75%. Best deal in town.....
I didn't like the number, but the idea of losing deposit is more scary..
I don't know what a reasonable rate is these days.
Any input?
NEXT TIME, get either a LOCK or one with a "float down option" if somebody says" lets see if they go lower. AND shop not just RATES but ALL THE TERMS and the integrity o f the lender too. Honesty is VERY hard to measure if you don't have something to more to go on than "it was just a number that did not mean the rate at closing".
Classic over promising and under delivering. Its what you expect from a sales person. Even if the rate was a great one, there is no reason for a loan officer to tell you 6.3% and then write 6.75% on the application. Why not just be honest and upfront and say 6.75% is what I can offer, leaving you to shop around or accepting it.
The rate does seem a little high with 1 point... but I always hate to quote rates without a full application in front of me. It's like writing a prescription based on hearing a few symptoms, you really need to do a full checkup before you give a diagnosis. FHA doesn't have many pricing adjustments though and with that credit and loan amount it seems a little off.
If they are a broker, then you can see what their "yield spread premium" was on the closing documents. Based on that and the origination/points you can tell how much they made from the transaction. If it was a bank or a "correspondent" relationship then the commission they make is not disclosed so there is no way for you to know.
The rates in the last two days have jumped about .5% because of the MBS funds. There is a big fear that inflation is going to drive rates higher. But then again...the rates may go down to the 5's again. nobody really knows.
I'm building and I locked at 6.375 and I'm hoping it goes down by the close time. The rate when I locked was just so so and I had to pay a point but I can lock way ahead of time. If the rate goes down I can re-lock within 30 days of closing....
Thanks.
On Monday I will make my final payment for closing cost. My broker call me last nigth with a history about maybe having to rise the rate a little bit because of market situation and the fact that we will be two days late on final closing. I have argued that he is supposed to get me a good rate, that is his job and the reason I worked with him, but he claims that he does not work for free
I am thinking on trying to transfer the loan to a different lender and take the risk of losing my deposit. I don't know if I can just take the loan to another lender since the broker originated everything but I have read that there is a choice with FHA.
I think that he is going to far and I am ****.
With FHA it's harder...he would need to transfer the 'case number'.
If he takes his time doing it, then you will be out of luck!
Quote:
Originally Posted by areca
Thanks.
On Monday I will make my final payment for closing cost. My broker call me last nigth with a history about maybe having to rise the rate a little bit because of market situation and the fact that we will be two days late on final closing. I have argued that he is supposed to get me a good rate, that is his job and the reason I worked with him, but he claims that he does not work for free
I am thinking on trying to transfer the loan to a different lender and take the risk of losing my deposit. I don't know if I can just take the loan to another lender since the broker originated everything but I have read that there is a choice with FHA.
I think that he is going to far and I am ****.
We closed escrow yesterday (Friday the 18th) on an FHA loan and our rate was 6.375% for 30-year fixed. Our scores are in the 620's since we're fairly new to the U.S. and have barely any credit history, and our loan amount is in the mid-$300k's. Maybe the rates vary by state? Or size of the loan? We're in WA.
As renriq said you need to get the FHA case # transferred. Regardless of loan type you always have a choice up until closing to switch lenders... but of course that will likely delay the process. A new underwriter needs to review it and some items need to have the lender's information changed.
Depending on how fast the new lender is it can take a few days or a few weeks to get an approval. The case # is a different issue because the person that currently has it assigned could either be nice and transfer it (takes 10 minutes) or could be a jerk and ignore your calls or give excuses out of spite.
You can go directly to FHA to get the case # transferred if a broker is trying to hold you hostage. A brokers job is not to get you the best rate. A broker should shop your loan around with different lenders and find the one with the best service, fees and rates that can approve the loan, but there is no fiduciary duty for them to do so.
This is why it is important to ask a broker more than "what's your rate" and instead to focus on their experience, education, integrity and reputation. Anyone can sell you on a rate, many loan officers are sales people plain and simple. Others will take the time to advise clients of their options and the pros/cons of their choices, but they do it because they understand customer service and its valye... not because its a job requirement.
You could also call 10 attorneys, contractors, plumbers, accountants, etc and pick the cheapest one.... but is that really the best method to pick a professional? You need to ask for references, education and the other factors that are just as important if not more so than the rate someone is willing to quote at the start. As you have seen that 6.3% can become 6.75% and higher during the process.
Thank you.
I do value professional services and others people work, however, because of that, my first cuestion was " what is your fee for making this loan to happen?". And the answer was very clear "I get paid by the lender". So, I don't think I should be charge $100 more a month for the next 30 years because he had to make a few more phone calls and I don't think that messages like this one "If you guys buy a place where the sale price accepted let’s say is $210,000…the loan amount will be 97% of that plus the federal mortgage insurance built in for a total loan amount of $206,755 and a payment at 6.375% will be $1289/month " can't be honor unless the market forces you to do it, wich I don't think has been the case lately. My point is don't tell me that I have to pay $1100 extra dollars over estimated closing cost for underwriter and loan process because they work hard. I respect that, just tell me before, not when I am already stuck with you.
I don't know anything about loans (I am learning a lot these days) but I understand that in the end is how much your APR is going to be, and the more I asked, I am told that 7.67 APR is far from OK nowadays.
I don't thing it is professional to call me one hour after I signed the loan documents to tell me that they migth not accept one of my bank accounts and that I have to come up with $1000 gift letter or that on Monday when I give my check the bank my raise the interest a little. I am expecting him to ask for more money and buy half a point just to avoid that.
We had problems coming up with the money for closing cost because of FHA regulations. We were told about regulations for the source of money as far as downpayment, not for closing.
I suggested to reduce point so we will not have problems at closing with the money "I called the lender and if the market stays where it is today and we were able to lock, we could probably get the discount down from $1400 to $1200" this was on 7/9. Well if that is the case, why didn't you lock?
Again, I respect people's work, but I quote people on jobs all the time and sometimes if I have to eat my mistakes, I do.
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