Posted on: 20th Jun, 2011 11:22 pm
I am buying a stand a lone home but it's zoned as a condo.
The lender quoted a rate of 4.75 instead of 4.50 which is the going rate on a 30 year fixed. My credit is 780 and I am putting 20% down. Why is the rate higher?
The lender quoted a rate of 4.75 instead of 4.50 which is the going rate on a 30 year fixed. My credit is 780 and I am putting 20% down. Why is the rate higher?
Hi Ockittykatt!
Welcome to forums!
It is your lender who will be able to let you know why you were quoted a higher rate. Nevertheless, I will suggest you to contact other lenders and check out what type of rates they will be able to give you.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It is your lender who will be able to let you know why you were quoted a higher rate. Nevertheless, I will suggest you to contact other lenders and check out what type of rates they will be able to give you.
Feel free to ask if you've further queries.
Sussane
You better consult other experts to evaluate your problem with the rates. Experts are ought to be trusted in these days. Might as well approach your lender and let him/her to explain it to you.
Generally a Single Family residence with a loan under 417k with impounded taxes and insurance will have the lowest rate. If you have a condo, rate is slightly higher. Larger loan amount, higher rate. Jumbo loan, higher rate. LTV is higher, higher rate. There are numerous add ons to the rate. This is the problem with advertising rates at 3.75% because for the most part, they dont exist. Most people are shocked because their scenario did not yield the teaser rate on TV or radio. A 4.75% rate on a condo for a 30 year loan is acceptable. You can also thank our lovely government for stepping in and forcing new legislation for compensation to loan originators. Now, each originator MUST earn a set commission. So to earn the commission, higher rate is charged. Before, to close the loan and make you happy, the company or the loan officer would take a pay cut to make the deal work for you. Now you cant. If you are paying all the closing costs out of pocket, then you can get a lower rate, but would have to pay 2-3 points to close the loan, which would include origination to loan officer, title, escrow and other third party fees. Send your appreciation in a letter to congress and state legislators for costing you more money.
>>Why is the rate higher?
Because Investors feel Condos are more risky then Single Family Residences - so they offset their perceived risk with the interest rate.
Because Investors feel Condos are more risky then Single Family Residences - so they offset their perceived risk with the interest rate.
