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Started By
Message
VA loan
Posted on 10/28/15 at 7:49 pm
Posted on 10/28/15 at 7:49 pm
so i'm getting stationed back in LA in february and the wife and i are starting the process of buying a house.
we got pre-approved for $180k, but the loan officer told me that'd make my monthly payment something like $1200/month which must mean i have an interest rate around 7%. that seems astronomical. i have average credit and the wife and i make $85k a year. obviously i'm going to call the loan officer tomorrow and find out more, but why is my interest rate so high?
this is through NOLA lending, FWIW.
we got pre-approved for $180k, but the loan officer told me that'd make my monthly payment something like $1200/month which must mean i have an interest rate around 7%. that seems astronomical. i have average credit and the wife and i make $85k a year. obviously i'm going to call the loan officer tomorrow and find out more, but why is my interest rate so high?
this is through NOLA lending, FWIW.
4
Posted on 10/28/15 at 7:57 pm to IPlayedGreatTonight
quote:
i have average credit and the wife and i make $85k a year.
Your income shouldn't affect your rate, only qualification. Sometimes, VA rates can be a little higher, more like 1/8 or 1/4, but this sounds like you're tier 3. I would almost suggest you get into an ARM and refinance in 4 to 6 years - rather than pay 7% fixed - especially if you can get an ARM under 5.
When you say "average" do you mean 680ish or 640ish? Because that's a big difference.
Your credit score is the 600 pound gorilla in this room, IMHO.
This post was edited on 10/28/15 at 8:00 pm
Posted on 10/28/15 at 8:07 pm to Ace Midnight
Just fyi if you are a disabled vet they will waive all funding fees, which I believe is 3% of the loan amount.
Posted on 10/28/15 at 8:24 pm to IPlayedGreatTonight
Are you just assuming a 7% interest rate or was it quoted?
He is prob including escrow and or PMI (not sure if va loans have PMI),
This post was edited on 10/28/15 at 8:26 pm
Posted on 10/28/15 at 8:33 pm to Tigerpaw123
quote:
PMI (not sure if va loans have PMI),
No PMI on VA loans.
Posted on 10/28/15 at 8:34 pm to Ace Midnight
No PMI, but should still have insurance and property tax in escrow?
Posted on 10/28/15 at 8:38 pm to Tigerpaw123
quote:
No PMI, but should still have insurance and property tax in escrow?
Yes - you still pay your normal escrow, monthly.
ETA: Unless banking practices have changed a lot in 5 years, I think they quote you the P&I. Your escrow isn't set until the closing packet is done, homeowner's carrier selected, NFIP (if applicable) and all that stuff is decided, although some loan officers, I'm sure, have an estimator and talk that through with the lendor.
This post was edited on 10/28/15 at 8:41 pm
Posted on 10/28/15 at 8:41 pm to Tigerpaw123
No way you should be getting 7% unless your credit is horrible. 30 year rate on a VA loan on Monday was about 3.75 I think.
Posted on 10/28/15 at 8:42 pm to Ace Midnight
So a 180k loan at 4.5% would have a monthly payment of just over$900 and $300 worth of escrow would be reasonable and would equal the 1200 payment the op is speaking of?
Posted on 10/28/15 at 8:46 pm to Tigerpaw123
quote:
So a 180k loan at 4.5% would have a monthly payment of just over$900 and $300 worth of escrow would be reasonable and would equal the 1200 payment the op is speaking of?
Maybe - if that's what is being quoted. That would be about right - 4 1/2-ish, with $3k (maybe more - if the funding fee can't be financed) or so at closing, P&I about $900ish. But no down is required against the principal.
If the $1200 is his P&I, that is a rate of about 7.
This post was edited on 10/28/15 at 8:47 pm
Posted on 10/28/15 at 9:04 pm to Ace Midnight
quote:
Are you just assuming a 7% interest rate or was it quoted?
totally assuming. like i said, i'm going underway for 2 weeks tomorrow and she called while i was in the middle of getting a brand new sailor prepared to go underway with me for his first time on a ship and finding out what ship we're going on, etc.
i just wasn't positive if that $1200 monthly payment she mentioned was including taxes & insurance. my buddy's mom is a big shot at latter and blum so i have help with any questions i have, i just was checking the boards so i figured i'd ask.
quote:
Your income shouldn't affect your rate, only qualification. Sometimes, VA rates can be a little higher, more like 1/8 or 1/4, but this sounds like you're tier 3. I would almost suggest you get into an ARM and refinance in 4 to 6 years - rather than pay 7% fixed - especially if you can get an ARM under 5.
When you say "average" do you mean 680ish or 640ish? Because that's a big difference.
Your credit score is the 600 pound gorilla in this room, IMHO.
i think she said my middle score was around 645, my wife's middle score was around 680.
Posted on 10/28/15 at 9:13 pm to IPlayedGreatTonight
quote:
i think she said my middle score was around 645, my wife's middle score was around 680.
Y'all are straddlin' the line - if they go with her score as primary, you might get Tier 2 - I'm not sure how that works, exactly, but you still shouldn't be paying 7% on the principal. I would get clarification on what your P&I is going to be, your rate, and your estimated escrow - just so you don't get sticker shock at the closing. I wouldn't think you would even pay 5% if you qualify - I think you should be between 3 1/2 or 3 5/8 at the bottom, up to, at most 4 3/8 or 4 1/2.
Not 7 by a long shot, unless you're borrowing from a guy with the same first name as a city or lots of vowels in his last name.
Posted on 10/28/15 at 9:17 pm to Ace Midnight
quote:
Y'all are straddlin' the line - if they go with her score as primary, you might get Tier 2 - I'm not sure how that works, exactly, but you still shouldn't be paying 7% on the principal. I would get clarification on what your P&I is going to be, your rate, and your estimated escrow - just so you don't get sticker shock at the closing. I wouldn't think you would even pay 5% if you qualify - I think you should be between 3 1/2 or 3 5/8 at the bottom, up to, at most 4 3/8 or 4 1/2.
Not 7 by a long shot, unless you're borrowing from a guy with the same first name as a city or lots of vowels in his last name.
haha yeah i didn't think it was 7. according to my buddy's mom who's worked with this lender before, they should be estimating taxes and insurance into that $1200.
Posted on 10/28/15 at 9:21 pm to IPlayedGreatTonight
quote:
They should be estimating taxes and insurance into that $1200.
If so, that should be a rate of about 4 1/2, as someone else said - not ideal, but it is what it is.
You know you're signing up for 360 payments of $1200, right, petty officer IPGT (or have I read you wrong and you're a lieutenant)?
Posted on 10/28/15 at 9:23 pm to Ace Midnight
quote:
If so, that should be a rate of about 4 1/2, as someone else said - not ideal, but it is what it is.
You know you're signing up for 360 payments of $1200, right, petty officer IPGT (or have I read you wrong and you're a lieutenant)?
yup. E5. that's basically my housing allowance so it should be fine. she put me in contact with another lender she knows so we're gonna give them a shot too and see what happens.
Posted on 10/29/15 at 12:15 am to IPlayedGreatTonight
quote:
$1200/month
Does that include your escrow for taxes and insurance?
Posted on 10/29/15 at 6:20 am to Ace Midnight
quote:
Y'all are straddlin' the line
just brokered a deal with agent on VA, told me their lender got in done with 593.
Posted on 10/29/15 at 10:48 am to IPlayedGreatTonight
that's a accurate payment estimate. and your VA 30yr fixed rate should be 3.625% at the highest right now no matter what your credit score. With the VA your rate is the same no matter what your score is as long as its over 640
Posted on 10/29/15 at 5:25 pm to hawkeye007
so my wife talked to the lender today.
4.125% interest rate. $1200/month includes taxes and insurance and was "a high side estimate so it could possibly be lower."
apparently the lender said we probably could go up to $200k if we wanted, but i don't think we really even wanted to spend $180k so i'm gonna assume that the payment will be a little under $1200/month.
i'm gonna assume the general advice here is going to be to shop around?
if so, what lenders do you recommend?
4.125% interest rate. $1200/month includes taxes and insurance and was "a high side estimate so it could possibly be lower."
apparently the lender said we probably could go up to $200k if we wanted, but i don't think we really even wanted to spend $180k so i'm gonna assume that the payment will be a little under $1200/month.
i'm gonna assume the general advice here is going to be to shop around?
if so, what lenders do you recommend?
Posted on 10/29/15 at 7:28 pm to IPlayedGreatTonight
That sounds right, as far as shopping around , just remember if you drop the interest rate a full point (which would be tough given your credit scores) your monthly note only goes down about a hundred dollars, and if you get out of the VA system you will likely pay PMI , so don't expect any big changes
This post was edited on 10/29/15 at 7:29 pm
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