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Yes Poker it sounds like you are on the right track, no harm in shopping
if you have time to switch before closing. Whoever you go to should
help you out with those questions as they fight to get your business.
I am no pro though, I am a first time homebuyer.
My Mortgage person finally called me back regarding the lower rate
option. Here is what I am confused about at THIS point (always something). I am locked at a %5.375 FHA 30yr fixed closing on 9/25.
She calls me back today and says that I can go a 1/4 point lower
for a half point (whatever that means) or $860. My other option
is to go down 1/8 of a % for a quarter point which would cost $429.
Thats funny because the main guy had told me if the rates go down
a 1/4 point it would cost $480 to get the float down to whatever it
was. Now they are acting like I can just "buy down".
I need to know now what would be the smartest thing to do considering
I will be in the house for 10 years at least and I want the monthly payment as low as possible??
What a HUGE CONFUSING PAIN!!! ATTENTION MORTGAGE BROKERS/LOAN
OFFICERS you stand to make a fortune off referrals if you will take the
time to educate people and walk them through it!!!!! Which my people
won't and once I get the keys to my house I am going to shout their names and the bank name from the rooftops as a warning.
I'm watching some mortgage online discussions where people in the industry are saying today's fixed rate mortrages were at 4.875%.
Do you see a possibility of doing a float to 5%?
Here is his response:
Quote:
O.K….I finally got a response on the interest rate…..the investor who we currently have it locked with …. May be willing to re-negotiate it down to the 5% (possibly without any additional cost) but their lock desk is closed for the day and we’ll have to do it tomorrow….so I’ll be getting back to you then.
So, it seems if I let them know their competition could potentially be lower, they seem to be eager to work with me. If they don't get me 5%, I'm going to talk with other lenders. My realtor advised me I would probably have to buy a new appraisal (most lenders require their own, wouldn't use the current one, and potential risk of new apprasial not meeting bank's requirements), so I'd be out another $350 plus the credit reports, etc. But if I do get 5% with everything else the same, I'll save ~$400/year, so it would just take a year to break-even and then it's money in the bank.
I'm in this same boat 1st time homebuyer locked in at 5.375% on Sept. 1 on a 30yr Fixed conventional loan, closing on 9/28
When I bought up the option to my mortgage broker about floating down he responded like I was crazy & told me "once you lock, that's it". Is it more paperwork for them to float down? Why would he be set against doing that?
I'm in this same boat 1st time homebuyer locked in at 5.375% on Sept. 1 on a 30yr Fixed conventional loan, closing on 9/28
When I bought up the option to my mortgage broker about floating down he responded like I was crazy & told me "once you lock, that's it". Is it more paperwork for them to float down? Why would he be set against doing that?
Many lenders including myself do not have any options for a "float down". A "Lock" is just that...you are "locked"...put another way your are "protected".
I have read your other posts. It sounds like your broker may have been trying a little to hard with giving advice. Working with 1st time homebuyers I will go over the top with information, BUT when it comes to locking I put the burden on the borrower as far as when to do it. None of us "know" which direction rates are heading. Especially in these unprecedented times.
5.375% is a great long term fixed rate. You made a decision to lock it in and you should stick with it. If rates had jumped up to 6% do you think the broker would be calling you to float up?
Many lenders including myself do not have any options for a "float down". A "Lock" is just that...you are "locked"...put another way your are "protected".
I have read your other posts. It sounds like your broker may have been trying a little to hard with giving advice. Working with 1st time homebuyers I will go over the top with information, BUT when it comes to locking I put the burden on the borrower as far as when to do it. None of us "know" which direction rates are heading. Especially in these unprecedented times.
5.375% is a great long term fixed rate. You made a decision to lock it in and you should stick with it. If rates had jumped up to 6% do you think the broker would be calling you to float up?
I understand the lock. But then I get people telling me I can pay to float down. I wasn't expecting too much, but just wanted an explanation from my broker as to how things work and if floating was an option for me. I thought a broker is supposed to explain ALL options
I just spoke with my broker and the rate can't be lowered, but he's agreed to waive the application & commitment fee? I'm assuming this is good
I just got word that the investor will move the rate down to 5.125% at no cost…and down to 5% at .25% cost ($573.38)…..let me know if you want me to re-lock at one of these options at this point….I’m not sure what the rates will do over the next 3 weeks.
What would you guys do?
According to my spreadsheet,
5.125% is $1,578.60/month ($228,950 loan)
5.000% is $1,561.05
$17.00 difference
$17.00/$573 = 33 months for break even
Hrmmmm keep $573 in bank for remodels or break even after 2.7 years
I'm doing the 5%. Plan to be in the house 5-10 years, so makes sense to do it. Plus, I wanna say I got 5% rate lol.
Plus I did the math and it's a $35 difference between 5.25% and 5.00%, which is more fair to do. So break even is only 16 months.
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