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Old 09-19-2011, 03:56 PM
 
8 posts, read 11,815 times
Reputation: 16

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Hi, I need advice on what to do next. I am in the process of finishing my final paper work for my new home. The problem is when I was quoted and when the process was rolling I verified (not in writing) but in person and over the phone that my loan will be a 30yr fixed rate. Now on the final paperwork that i have to sign it says 3.0% adjustable rate. 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. She also told me that since its only 3% I can refinance in 2-3 yrs to get a fixed rate. I dont want to do that either.

She also told me that 3% is fixed for 5-6yrs and then after that it can be adjusted 1% (one time) per year only and up to a max of 8% in its life time of the loan. Is there any truth in that? is this a decent deal or not? I feel cheated

I want house, i just dont want the adjustable rate as I want to make sure that i can still afford the house in 10 years.

thanks.
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Old 09-19-2011, 04:38 PM
 
Location: SF Bay Area
1,290 posts, read 1,865,399 times
Reputation: 816
Go to another lender pronto! To me this is dishonest practice. The apology of sorry nobody told you about the adjustable product is bull! There is no excuses for the lender/loan officer/broker not to tell you what you are signing up for. If they lead you on this far imagine what else they are not telling you.
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Old 09-19-2011, 08:50 PM
 
8 posts, read 11,815 times
Reputation: 16
Thank you. I will be doing that soon or just drop this whole idea of a owning a home for now. I just need them to give me back my deposit.
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Old 09-19-2011, 09:46 PM
 
Location: Phoenix, AZ > Raleigh, NC
16,781 posts, read 21,784,423 times
Reputation: 27928
1. Run, don't walk, away from this lender (Aka as theif, con artist, *******, ripoff artist, etc).

2. Give yourself extra brownie points for having the sense to read the documents.

3. Give youself a super big gold star for being willing to walk away. I'm impressed! Well done!

4. If you want to try to go forward with this house, tell us how you found this crappy guy, who else you talked to first, and some other specifics of your mortgage needs and personal details. We'll ALL have suggestions for you, I'm sure.
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Old 09-19-2011, 10:38 PM
 
8 posts, read 11,815 times
Reputation: 16
Thanks! I am waiting to hear back from them. Its a well known company who is affiliated with a well known crappy bank so I didnt think i'll run into this type of problem. I'll let you guys know more of the issue or details when I hear back from them.
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Old 09-20-2011, 07:33 PM
 
8 posts, read 11,815 times
Reputation: 16
Update: today they called n offered a 3.9% interest on a fixed rate.
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Old 09-23-2011, 08:17 AM
 
Location: Lending in all 50 states
189 posts, read 747,099 times
Reputation: 109
Quote:
Originally Posted by mstacyi View Post
Update: today they called n offered a 3.9% interest on a fixed rate.
You can do better on an FHA 30 year fixed
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Old 09-23-2011, 08:35 AM
 
4,982 posts, read 12,660,503 times
Reputation: 3786
Quote:
Originally Posted by nmb30 View Post
You can do better on an FHA 30 year fixed
How would you know? Do you know the specifics of the OP's loan?

What if they are putting 20% down, should they still look at FHA with HIGH COST mortgage insurance?
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Old 09-23-2011, 09:15 AM
 
Location: Lending in all 50 states
189 posts, read 747,099 times
Reputation: 109
Quote:
Originally Posted by TimtheGuy View Post
How would you know? Do you know the specifics of the OP's loan?

What if they are putting 20% down, should they still look at FHA with HIGH COST mortgage insurance?


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?
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Old 09-23-2011, 09:54 AM
 
Location: MID ATLANTIC
8,206 posts, read 20,316,560 times
Reputation: 9467
Quote:
Originally Posted by nmb30 View Post
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?

The OP states she is buying a new home. Chances are she is with the builder's lender 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, 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.
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