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The OP stated she started out looking for a fixed rate loan and was told she only qualified for an ARM. If she had applied for a conventional loan with 20% down and didn't qualify for a 30 year fixed there is no way she would have qualified for a conventional ARM.
Not only that but based on the details of the ARM she was offered I know for a fact that she had applied for an FHA loan because FHA/VA ARMs the only ones that offer 1/1/5 caps.
Do you have any other questions?
I read it as they sent her loan through as the ARM, not that that was the only thing she could quailfy for. It is not stated very clearly
"The lender told me that adjustable rate was what they approved me for and she is sorry that "adjustable rate" have never been discussed with me."
The OP states she is buying a new home. Chances are she is with the builder's lender (assumption made by you) and she needs to close with the builder's lender to receive any seller paid closing costs - going elsewhere will most likely cost her more money. Most of the builders these days are paying significant closing costs. A 3.9% would most likely be the APR on an FHA loan( assumption made by you), which indicates to me, it's in line with current market conditions. The APR considers not only the payment rate, but the MIP and any fees, meaning she is paying the going market rate.
I 100% agree with Tim, before you set anyone into a panic thinking they got ripped off, the complete story needs to be known.(yet here you are spouting your opinion with several assumptions)
I didn't say the OP is getting ripped off. I stated she could do better, that's it nothing more nothing less.
Which part are you agreeing with Tim about?
It sure does look hypocrtical for both of guys to make sweeping assumptions and then try and condemn me because YOU think I posted my opinion without enough information.
I read it as they sent her loan through as the ARM, not that that was the only thing she could quailfy for. It is not stated very clearly
"The lender told me that adjustable rate was what they approved me for and she is sorry that "adjustable rate" have never been discussed with me."
That's a good point. The OP didn't state that was all she was approved for but the only reason a respectable lender would switch a file from fixed to adjustable without the borrower's expressed interest in an ARM is if they could not get an approval on the fixed rate due to debt to income ratio issues.
The OP stated she started out looking for a fixed rate loan and was told she only qualified for an ARM. If she had applied for a conventional loan with 20% down and didn't qualify for a 30 year fixed there is no way she would have qualified for a conventional ARM.
Not only that but based on the details of the ARM she was offered I know for a fact that she had applied for an FHA loan because FHA/VA ARMs the only ones that offer 1/1/5 caps.
Do you have any other questions?
Sure. My other question would be what if it is a $50k loan, and the borrower can't afford to pay any origination or points, has a 620 FICO and needs a 45 or 60 day lock? Can she do better than 3.875% on that?
That's a good point. The OP didn't state that was all she was approved for but the only reason a respectable lender would switch a file from fixed to adjustable without the borrower's expressed interest in an ARM is if they could not get an approval on the fixed rate due to debt to income ratio issues.
True, but I wouldn't call the lender respectable if they shove a borrower into an ARM completely unannounced.
Hi, I looked into the loan, did some research, and spoke with an attorney also. I was not inform of the adjustable rate so after demanding for a fix rate they quickly redo my loan with a fixed rate of 4% which i am happy with. I am now in my new home. I would like to thank all of you for replying to my post.
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