Posted on: 06th Feb, 2008 12:19 pm
Hi! I really hope someone can help me. I am looking into refinacing my current mortgage and getting some cash out to make home repairs. I guess I just want to make sure all is okay with the offer I got.
Our broker said our credit numbers aren't very good so the only loan we qualify for is FHA? Is that correct? Is it normal for FHA to charge a mortgage insurance premium of $837 (rolled into loan) and than have to a monthly rate in the escrow?
Is it normal to have 6 months in my escrow?
I thought rates where super low so why am I only qualifying for 6.5%
Okay, I live in PA, my current mortgage has a pay-off balance of 40,000 and my intrest rate is 7.5% I have 20 years left to pay on a 30 year mortgage. My payment right now including escrow is 581.00.
I got an offer of an FHA at 6.5% with closing costs of $2258 and upfront costs of 2304 for escrow and cash out at 11,000 roughly bringing the new loan to 56,662 with a monthly payment about $600.
Is this something I should look into to? I am really nervous about the monthly payment and would prefer no more than $550 and would like a better intrest rate, but not sure.
Please, any help, suggestions are so greatly appreciated!!!!
Jenn
Our broker said our credit numbers aren't very good so the only loan we qualify for is FHA? Is that correct? Is it normal for FHA to charge a mortgage insurance premium of $837 (rolled into loan) and than have to a monthly rate in the escrow?
Is it normal to have 6 months in my escrow?
I thought rates where super low so why am I only qualifying for 6.5%
Okay, I live in PA, my current mortgage has a pay-off balance of 40,000 and my intrest rate is 7.5% I have 20 years left to pay on a 30 year mortgage. My payment right now including escrow is 581.00.
I got an offer of an FHA at 6.5% with closing costs of $2258 and upfront costs of 2304 for escrow and cash out at 11,000 roughly bringing the new loan to 56,662 with a monthly payment about $600.
Is this something I should look into to? I am really nervous about the monthly payment and would prefer no more than $550 and would like a better intrest rate, but not sure.
Please, any help, suggestions are so greatly appreciated!!!!
Jenn
"the only loan we qualify for is FHA?" That statment is a bit exaggerated one, if your credit is super low, you won't even qualify for FHA, I'm presuming your credit to be in 580's - 600's. Now, with that kind of credit scores, you certainly get good interest rate with FHA backed loans. However, you would be asked for extended escrow reserves.
From what you have mentioned, it seems that you could have qualified for 5.75 - 6.00% but your broker is not charging you the 800 series fees instead he/she's compensating the same with a higher interest rate. Hence, your closing cost is $2258 - That takes care of all the third party fees.
If you ask me, I'd say, ask for the copy of your credit report from the broker so that you know what your scores are and consider shopping with a couple of more lenders/brokers by telling them about your situation.
Make sure you compare the Good Faith Estimates, should you decide to shop around.
Hope this helps, let us know if you have any questions.
From what you have mentioned, it seems that you could have qualified for 5.75 - 6.00% but your broker is not charging you the 800 series fees instead he/she's compensating the same with a higher interest rate. Hence, your closing cost is $2258 - That takes care of all the third party fees.
If you ask me, I'd say, ask for the copy of your credit report from the broker so that you know what your scores are and consider shopping with a couple of more lenders/brokers by telling them about your situation.
Make sure you compare the Good Faith Estimates, should you decide to shop around.
Hope this helps, let us know if you have any questions.
I'm confused what is 800 series? Our numbers are in the low to mid 600's.
Our broker also said that by shopping around we lower our numbers, is that true?
Do you think that this is all a fair amount and okay to proceed? I am thinking of looking into my credit union, but they are so picky with loans.
Our broker also said that by shopping around we lower our numbers, is that true?
Do you think that this is all a fair amount and okay to proceed? I am thinking of looking into my credit union, but they are so picky with loans.
800 Series in the Good faith estimate consists of :
a. Loan Origination Fee
b. Discount Points Charge
c. Broker Fee
d. Cloding Coordination Fee
e. Lender Admin Fee
f. Application Fee
No, your broker lied or they don't know their stuff.
You must know this, Normally inquiries have roughly 10% influence on your credit scores that's only if you do it after 30 days from a particular pull. In short, after every pull your credit wouldn't be affected for the next 30 days irrespective of the inquiries in the interim.
Yes, the deal offered to you seems to be pretty fair because that's how an FHA loan is but I'm sure you can also qualify for a conventional loan with that credit score. In that case, the interest rate could be a bit higher However, if you have a decent amount of assests (liquid assets only) to show, you might also qualify for the best program.
All in all, I must say that the deal offered to you is pretty okay, you might want to negotiate on the interest rate with your broker, there is a scope that it can go down by 0.125 - 0.25%.
Considering your credit union wouldn't be a bad option but I'm sure you know how they work and what are their criterion for qualifying.
Good luck!
a. Loan Origination Fee
b. Discount Points Charge
c. Broker Fee
d. Cloding Coordination Fee
e. Lender Admin Fee
f. Application Fee
No, your broker lied or they don't know their stuff.
You must know this, Normally inquiries have roughly 10% influence on your credit scores that's only if you do it after 30 days from a particular pull. In short, after every pull your credit wouldn't be affected for the next 30 days irrespective of the inquiries in the interim.
Yes, the deal offered to you seems to be pretty fair because that's how an FHA loan is but I'm sure you can also qualify for a conventional loan with that credit score. In that case, the interest rate could be a bit higher However, if you have a decent amount of assests (liquid assets only) to show, you might also qualify for the best program.
All in all, I must say that the deal offered to you is pretty okay, you might want to negotiate on the interest rate with your broker, there is a scope that it can go down by 0.125 - 0.25%.
Considering your credit union wouldn't be a bad option but I'm sure you know how they work and what are their criterion for qualifying.
Good luck!
Welcome to the forum Dandybug.
Shayne provides you with some great advice. I too think you should consider speaking with your credit union and investigating a conventional loan.
Once you have a few more loan offers and programs to choose from, you can pick the one that is more comfortable for you.
Please let us know if you have any further questions we can answer.
Shayne provides you with some great advice. I too think you should consider speaking with your credit union and investigating a conventional loan.
Once you have a few more loan offers and programs to choose from, you can pick the one that is more comfortable for you.
Please let us know if you have any further questions we can answer.
All mortgage related credit pulls in a 14 day period count as a single pull. Your credit union uses the same underwriting engine as your broker....I would suggest looking at maybe a 20 year loan or even a 15 year loan to get a lower rate and the payments will be about the same.
Our broker said our credit numbers aren't very good so the only loan we qualify for is FHA? Is that correct? Most likely not but being that this is a small loan ammount the broker can make more money on an FHA loan so that is why he told that what you need to do.
Is it normal for FHA to charge a mortgage insurance premium of $837 (rolled into loan) and than have to a monthly rate in the escrow? Yes 1.5% Upfront MI is charged on all FHA loans and the recurring monthly MI on thouse loans that are 15 yrs+ and 90% or more LTV
Is it normal to have 6 months in my escrow? Yes, up to 8 months worth of escrow can be required depending on when you doing your financing.
I thought rates where super low so why am I only qualifying for 6.5%. Brecause broker wants to make more money and looking at your rate he is making about 3.5%-4% wich is about the maximum he can make. You should be getting a rate in of around 5.75-6% and your credit got nothing to do with an FHA rate its the same for all the only difference is how much a broker wants to make and the current market.
Okay, I live in PA, my current mortgage has a pay-off balance of 40,000 and my intrest rate is 7.5% I have 20 years left to pay on a 30 year mortgage. My payment right now including escrow is 581.00.
I got an offer of an FHA at 6.5% with closing costs of $2258 and upfront costs of 2304 for escrow and cash out at 11,000 roughly bringing the new loan to 56,662 with a monthly payment about $600.
Well your closing costs should be around $4200 (that is total cost and Id really would have to look at GFE to tell you if you are being charged too much ) and what do you mean 2304 for escrow upfront? seems something fishy here. So if thouse 4200 are rolled into the loan along with $11000 cash you should be right at 56000 with a mortgage payment of $336 and MI payment of $25 roughly (add to that your taxes and insurance and you get a monthly payment)
Is this something I should look into to? I am really nervous about the monthly payment and would prefer no more than $550 and would like a better intrest rate, but not sure.
(definately get a second oppinion)
Please, any help, suggestions are so greatly appreciated!!!!
If I was a betting man, and I am :) this is a classic case of greed the broker you working with found an easy target who doesnt know what he/she is doing and decided to make as much as he can. Being that this is a small amoount loan also might be what has made him want to charge more. He is trying to make more money basing it on the fact that he has to work more for less money otherwise. There can be other explanation but this one is the most likely to me. Get a second oppinion!
Is it normal for FHA to charge a mortgage insurance premium of $837 (rolled into loan) and than have to a monthly rate in the escrow? Yes 1.5% Upfront MI is charged on all FHA loans and the recurring monthly MI on thouse loans that are 15 yrs+ and 90% or more LTV
Is it normal to have 6 months in my escrow? Yes, up to 8 months worth of escrow can be required depending on when you doing your financing.
I thought rates where super low so why am I only qualifying for 6.5%. Brecause broker wants to make more money and looking at your rate he is making about 3.5%-4% wich is about the maximum he can make. You should be getting a rate in of around 5.75-6% and your credit got nothing to do with an FHA rate its the same for all the only difference is how much a broker wants to make and the current market.
Okay, I live in PA, my current mortgage has a pay-off balance of 40,000 and my intrest rate is 7.5% I have 20 years left to pay on a 30 year mortgage. My payment right now including escrow is 581.00.
I got an offer of an FHA at 6.5% with closing costs of $2258 and upfront costs of 2304 for escrow and cash out at 11,000 roughly bringing the new loan to 56,662 with a monthly payment about $600.
Well your closing costs should be around $4200 (that is total cost and Id really would have to look at GFE to tell you if you are being charged too much ) and what do you mean 2304 for escrow upfront? seems something fishy here. So if thouse 4200 are rolled into the loan along with $11000 cash you should be right at 56000 with a mortgage payment of $336 and MI payment of $25 roughly (add to that your taxes and insurance and you get a monthly payment)
Is this something I should look into to? I am really nervous about the monthly payment and would prefer no more than $550 and would like a better intrest rate, but not sure.
(definately get a second oppinion)
Please, any help, suggestions are so greatly appreciated!!!!
If I was a betting man, and I am :) this is a classic case of greed the broker you working with found an easy target who doesnt know what he/she is doing and decided to make as much as he can. Being that this is a small amoount loan also might be what has made him want to charge more. He is trying to make more money basing it on the fact that he has to work more for less money otherwise. There can be other explanation but this one is the most likely to me. Get a second oppinion!
all in all, i am not in disagreement with anyone specifically.
that being said, however; i think eugene is a little harsh in criticizing the lender for pricing. yes, there are variables in the rates/fees that allow for a little more income, and in all likelihood this lender has increased the rate a shade to account for that. generally, with a slightly higher rate, your closing costs are less; and vice versa - a lower rate will bring you more costs.
perhaps the rate/fees situation allows you to get a greater amount of cash back at closing. you didn't mention appraised value - not sure if that means you don't know it yet or perhaps you don't think it is relevant. it may be relevant, but since we don't know that, all of our postings are pure speculation.
at any rate, you have a fair deal going there - if you think you can do better, then you should investigate that with other lenders - again, keep in mind that some other lenders won't even be able to do an fha loan.
that being said, however; i think eugene is a little harsh in criticizing the lender for pricing. yes, there are variables in the rates/fees that allow for a little more income, and in all likelihood this lender has increased the rate a shade to account for that. generally, with a slightly higher rate, your closing costs are less; and vice versa - a lower rate will bring you more costs.
perhaps the rate/fees situation allows you to get a greater amount of cash back at closing. you didn't mention appraised value - not sure if that means you don't know it yet or perhaps you don't think it is relevant. it may be relevant, but since we don't know that, all of our postings are pure speculation.
at any rate, you have a fair deal going there - if you think you can do better, then you should investigate that with other lenders - again, keep in mind that some other lenders won't even be able to do an fha loan.
