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Started By
Message
Interest Rate on Home Loan
Posted on 4/22/16 at 10:43 am
Posted on 4/22/16 at 10:43 am
Looking to purchase a new home and I've been researching interest rates and they seem to be all over the place. I have great credit, credit score over 820 and my fico score is 760. Not sure how all that works but fico seems like it should be higher. Anyway I was offered a 4% interest rate and I really thought it would be lower.
Wondering if anyone here has a pulse on what interest rates should be for someone with those scores? I know there are other factors but I'm just curious.
Wondering if anyone here has a pulse on what interest rates should be for someone with those scores? I know there are other factors but I'm just curious.
6
Posted on 4/22/16 at 10:49 am to ShrevetownTiger
I got 3.5% on house I closed on two weeks ago.
Posted on 4/22/16 at 11:00 am to ShrevetownTiger
What is your DTI ratio? What it the LTV ratio on the loan using the lower of appraisal or purchase price?
Posted on 4/22/16 at 11:03 am to ShrevetownTiger
You should be able to do better. I saw 3.625 on Monday with 1k in lender fees. You definitely have to factor if the lender is charging you an origination fee or not when quoting out. Don't quote the larger banks. Try standard mortgage, assurance financial, gmfs, or Iberia.
Posted on 4/22/16 at 11:10 am to ShrevetownTiger
Was the 760 FICO the score the lender gave you when you were getting pre-approved? If so you should be getting better rates than that. Try other banks because your score won't get dinged anymore for inquiries while you're rate shopping.
Posted on 4/22/16 at 11:30 am to JonTheTigerFan
Ok, I just went through USAA and I got 3.6 for 30 year and 3.0 for 15 year. That's much better. I didn't ask while I was on the phone about my scores but I sent an email requesting them.
Thanks for your help guys, maybe I just went to the wrong people first!
Thanks for your help guys, maybe I just went to the wrong people first!
Posted on 4/22/16 at 1:52 pm to ShrevetownTiger
If you feel confident you can get through the mortgage process paperwork + supporting docs yourself, try out an online lender
I got my original loan Consumer Direct Mortgage, refi'd Sebonic Financial. No one came close to touching the mortgage rates
Closed 4/3 with a 3.625%, $0 lender fees and they gave me a $300 lender credit towards non lender closing costs. Credit score 720-739
I got my original loan Consumer Direct Mortgage, refi'd Sebonic Financial. No one came close to touching the mortgage rates
Closed 4/3 with a 3.625%, $0 lender fees and they gave me a $300 lender credit towards non lender closing costs. Credit score 720-739
Posted on 4/22/16 at 2:08 pm to GenesChin
quote:
I got my original loan Consumer Direct Mortgage, refi'd Sebonic Financial. No one came close to touching the mortgage rate
My fear with going with someone like this is how well they manage insurance checks made out to me and my lender.
Posted on 4/22/16 at 2:26 pm to ShrevetownTiger
quote:
I have great credit, credit score over 820 and my fico score is 760. Not sure how all that works but fico seems like it should be higher. Anyway I was offered a 4% interest rate and I really thought it would be lower.
I am in the process of closing right now and my wife and I have very good credit scores. My lender just submitted my paperwork and I was given a 4% interest rate. Unless i was willing to buy down points, I was essentially set at 4%. It seems the housing market and interest rates are slowly creeping back up.
Posted on 4/22/16 at 2:35 pm to cberni1
(no message)
This post was edited on 6/25/17 at 7:31 pm
Posted on 4/22/16 at 2:42 pm to man117
Shop around, take a couple hours. Make sure and talk to some local banks and credit unions, bigger banks, etc. Just tell them you are shopping around, my credit score is xxx, what is your 15 and 30 year rates with no points.
If they moan and talk around, tell them thanks but you'll find someone else. There is literally 30 people or more that you can get a mortgage from, and 25 of them are going to sell your mortgage on the market in 60 days. The other 5 in the first year. So who you write your checks to in 3 months after closing is not going to be the same person most likely, so don't feel compelled to go with someone local you like.
The differences can easily be 0.5% or more by shopping around. I made the mistake myself on my first mortgage. The mistake that everyone makes is, rates online are 0.5% lower but I guess I just don't qualify??? No, you just got suckered or were too lazy to call around. Chances are with a couple phone calls you can get a better rate.
If they moan and talk around, tell them thanks but you'll find someone else. There is literally 30 people or more that you can get a mortgage from, and 25 of them are going to sell your mortgage on the market in 60 days. The other 5 in the first year. So who you write your checks to in 3 months after closing is not going to be the same person most likely, so don't feel compelled to go with someone local you like.
The differences can easily be 0.5% or more by shopping around. I made the mistake myself on my first mortgage. The mistake that everyone makes is, rates online are 0.5% lower but I guess I just don't qualify??? No, you just got suckered or were too lazy to call around. Chances are with a couple phone calls you can get a better rate.
Posted on 4/23/16 at 11:18 am to baldona
There seems to be some confusion. Just because you have great credit, that's only one aspect of the equation.
I've seen folks with great credit who had a Bankruptcy in their history less than a decade before. You can also have great credit but have a balance of income and debts that leave you with a riskier profile to the typical lender's underwriter (whose making the decision on what program-and what rate-you're going to get ultimately).
If you make great income, or bad income, and have bills like credit cards, boat loans, ATV's, installment loans, appliances financed, etc., that stretch you fairly thin when you factor them in along with a potential house-note, then you can believe you will be considered riskier from a credit perspective. That risk for lender's is expressed in how much of an interest rate you pay.
The lower the risk of the loan, the more the lender is willing to entice and reward you for that lowered risk via a lower interest rate. Conversely, the riskier you are to a lender, the higher the interest rate.
Loans-especially mortgages-are all about the collateral and the ability to repay. The house, the price, the down payment, your credit, your income, the debt-to-income, the loan-to-value...they're all boiled down into those two big-picture categories. What is the collateral, and what is your ability to repay as a potential borrower?
Now another factor that has nothing to do with your income, the house you're looking for, the neighborhood you're shopping in, etc....is the lender themselves. Some local credit unions and banks want no part of complicated borrowers that don't fit into very, very small profiles or sweet spots that they will offer conforming (read: low) interest rates to.
They want huge down payments. They want great income. They want fantastic credit. They don't want any bills on your bureaus. They want cookie cutter. If they don't get it, you are going to pay with a high % rate.
Also, most banks or lending institutions are what are considered "bank-line," products, or that they're line of capital they're lending to you is all their own. They only have a certain number of products, and that restriction means they don't have as much versatility to offer you a program that may reward you with a lower % rate. What they have is what they have in essence. If you can't get a low rate with it, them's the breaks.
In my personal opinion, a broker is going to give you the best opportunity to shop for bank-line products (many have relationships with larger, national banks and their mortgage arms-ala Chase, etc) as well as niche lenders that may specialize in loans that are tailored to customers that present your unique credit and risk profiles.
When a loan officer that works for a broker can shop around multiple different lenders for the best rates and pull in account executives that they work with and can have them compete for his business, it results in lower prices. It's a basic aspect of capitalism in a sense. Competition tends to lower price.
Brokers enjoy this benefit where traditional brick-and=-mortar lenders like a bank or credit union often do not.
So I'd suggest making sure you have the right mortgage professional that has the capability to shop around and find the right fit for the right price (read: Interest rate) for you based on what you want.
If low rate is all-important to you, then let them know. If high loan-to-value (so you can lower your down payment and pay for furniture, appliances, or work on the house) is important, then let them know. Once you give them a picture of what's important then that helps them narrow down the targets for you.
...and the more you tell them, the closer to the mark a good broker will get you in my opinion.
Good luck.
I've seen folks with great credit who had a Bankruptcy in their history less than a decade before. You can also have great credit but have a balance of income and debts that leave you with a riskier profile to the typical lender's underwriter (whose making the decision on what program-and what rate-you're going to get ultimately).
If you make great income, or bad income, and have bills like credit cards, boat loans, ATV's, installment loans, appliances financed, etc., that stretch you fairly thin when you factor them in along with a potential house-note, then you can believe you will be considered riskier from a credit perspective. That risk for lender's is expressed in how much of an interest rate you pay.
The lower the risk of the loan, the more the lender is willing to entice and reward you for that lowered risk via a lower interest rate. Conversely, the riskier you are to a lender, the higher the interest rate.
Loans-especially mortgages-are all about the collateral and the ability to repay. The house, the price, the down payment, your credit, your income, the debt-to-income, the loan-to-value...they're all boiled down into those two big-picture categories. What is the collateral, and what is your ability to repay as a potential borrower?
Now another factor that has nothing to do with your income, the house you're looking for, the neighborhood you're shopping in, etc....is the lender themselves. Some local credit unions and banks want no part of complicated borrowers that don't fit into very, very small profiles or sweet spots that they will offer conforming (read: low) interest rates to.
They want huge down payments. They want great income. They want fantastic credit. They don't want any bills on your bureaus. They want cookie cutter. If they don't get it, you are going to pay with a high % rate.
Also, most banks or lending institutions are what are considered "bank-line," products, or that they're line of capital they're lending to you is all their own. They only have a certain number of products, and that restriction means they don't have as much versatility to offer you a program that may reward you with a lower % rate. What they have is what they have in essence. If you can't get a low rate with it, them's the breaks.
In my personal opinion, a broker is going to give you the best opportunity to shop for bank-line products (many have relationships with larger, national banks and their mortgage arms-ala Chase, etc) as well as niche lenders that may specialize in loans that are tailored to customers that present your unique credit and risk profiles.
When a loan officer that works for a broker can shop around multiple different lenders for the best rates and pull in account executives that they work with and can have them compete for his business, it results in lower prices. It's a basic aspect of capitalism in a sense. Competition tends to lower price.
Brokers enjoy this benefit where traditional brick-and=-mortar lenders like a bank or credit union often do not.
So I'd suggest making sure you have the right mortgage professional that has the capability to shop around and find the right fit for the right price (read: Interest rate) for you based on what you want.
If low rate is all-important to you, then let them know. If high loan-to-value (so you can lower your down payment and pay for furniture, appliances, or work on the house) is important, then let them know. Once you give them a picture of what's important then that helps them narrow down the targets for you.
...and the more you tell them, the closer to the mark a good broker will get you in my opinion.
Good luck.
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