Any Bankers or Finance Wizards Around Here?

eyedclaar

I am in the middle of researching a re-fi for my home and I am looking at doing a 15 year fixed loan. I currently have one lender talked down to a 5% flat fixed rate.

Now, I have a credit score over 800 and I want to know if that is about as good as I can expect or if I should keep pushing? My nature is to push... Also, despite my high credit score, I am the least responsible person I know and can offer no financial advice to anyone. In other words, I have no idea how I managed it; I somehow made it out of the lysergic mist with great credit. Probably all those cash transactions... But still, with my credit score, should I be more demanding?

Any help would be appreciated...

Phantom Pain

I'm no expert.....but I play one on TV

Seriously 5% sounds pretty good...what is your rate right now ?

Also, do you have a decent amount of equity in your house already ?

eyedclaar

Phantom Pain wrote:

I'm no expert.....but I play one on TV

Seriously 5% sounds pretty good...what is your rate right now ?

Also, do you have a decent amount of equity in your house already ?

Well, Boise Idaho totally blew up as far as real estate goes like the second after I bought my house and is still doing better than most of the country. So, I haven't had the house that long (4 years) but it is already worth way more than I paid for it (just had it appraised). Not to mention all the remodeling we have done. Right now I have a 30 year fixed at 6.35 (I think).

sponger

well I have an accounting degree and I'm an analyst at a fortune 400 money management firm. But neither of those things would be necessary for me to tell you that 5% fixed is a pretty damn good rate. Methinks that you were able to get such a good fixed rate because you agreed to what is essentially a short term loan.

Now, a friend of mine just bought a place with a 4.66% fixed rate and that's because she's been neck deep in the real estate industry for years. In fact, the place she bought was a short sale, so the whole situation had bargain written all over it.

Personally I think the market is going to bottom out like crazy over the next couple of years, so no matter what price you got right now, expect to see the value decrease very soon.

Interest rates are not supposed to be that low, and eventually they WILL come back up or else the dollar will devalue, and I don't think the fed will allow that to happen for very long.

Also, the government is going to step in and regulate the mortgage industry so that home loans will no longer be handed out like candy. This will also affect housing prices as demand decreases.

ringo

You can't go wrong with this plan:

Phase 1 - Collect underpants
Phase 2 - ?
Phase 3 - Profit

mirrorthelight

eyedclaar wrote:

I am in the middle of researching a re-fi for my home and I am looking at doing a 15 year fixed loan. I currently have one lender talked down to a 5% flat fixed rate.

Now, I have a credit score over 800 and I want to know if that is about as good as I can expect or if I should keep pushing? My nature is to push... Also, despite my high credit score, I am the least responsible person I know and can offer no financial advice to anyone. In other words, I have no idea how I managed it; I somehow made it out of the lysergic mist with great credit. Probably all those cash transactions... But still, with my credit score, should I be more demanding?

Any help would be appreciated...

I used to work in the subprime mortgage industry before everything hit the fan and with your outstanding credit score, I would take that rate and run with it especially with how the market is right now. Just be sure to look at your Good Faith Estimate and make sure that the loan officer isn't raping you in the back with fees or commission that you don't know about.

anotherclone

I am an escrow officer and I can't tell you the last time I saw a 5% rate on a closing. That is really good. I think the lowest I saw was yesterday and it was 5.375%

Are you paying any points or origination fees to the lender? If you are, technically, you are probably buying down that rate by paying that fee. So watch out for that kind of stuff.

I mean,

-You get a 5% rate BUT,
-You are charged a $1000 origination (or something of that nature) fee
-But the lender increases your new loan amount to cover that cost (so you don't bring in any $$ to close)
-You pay a higher loan amount and higher payment

Make sure that is worth it to you.

As mirrorthelight mentioned, check your Good Faith Est and Truth in Lending Disclosure. The lender has to dislose your APR to you on your TIL. The theory is that if your interest rate is 5% and your APR is pretty close to that, you probably aren't getting raped in fees.

eyedclaar

Thanks for the help, folks. I am accepting the offer. I've been a total pain in their ass to get the 5% and there aren't any hidden fees. The lender told me he wished he would have never answered the phone. After reworking the deal a few times, I think I grudgingly earned his respect.

know1

I was offered a 5% on a 15 yr fixed rate a couple of weeks ago. I have a high credit score, but I do get dinged a little due to the fact that I do not use credit cards very much so I just have one card with a low limit.

I'd say you're pretty close, but you might get another quarter point.

eyedclaar

know1 wrote:

I was offered a 5% on a 15 yr fixed rate a couple of weeks ago. I have a high credit score, but I do get dinged a little due to the fact that I do not use credit cards very much so I just have one card with a low limit.

I'd say you're pretty close, but you might get another quarter point.

Yeah, I thought I might too. Anyway, I'm not sure the whole "you have to establish credit via credit cards" is legit. I only say that because I don't own a single credit card and my credit is over 800. One lender guy tried to say that to me and I was like, "So, does my credit score have an asterik by it or what?"

He said, "well no, but..." blah, blah, blah... They just want you to have credit cards, but I don't buy the whole arguement about needing them to improve or establish your credit.

I could be wrong though...

Shawn Smith Collective

I'm the vice president of a wholesale mortgage brokerage. I deal with over 30 lenders including Chase and Wells Fargo. As of the last rate change of the day today, 5.0% for a 15-yr fixed COSTS almost half a point in discount fees. So yeah, you're probably paying for the rate. I don't know what he's charging you as a broker/origination fee, but it's certaily enough to cover the discount + his own fee (unless he's hiding something).

Also, the type of person who would tell you they wish they didn't pick up the phone or engage in the type of chewdown tactics you used instead of being straight up about the costs of the rate is probably not the type of person you really want handling the transaction. You have a salesperson, not a mortgage professional...and THAT's why you believe that you "grudgingly earned his respect."

Sorry charlito, but with what little info I have to go on, it's not looking so good. And as the title/escrow officer noted, the lowest (s)he's been seeing is 5.375% bc that's the closest to PAR rate as there's been on a 15-year in awhile.

mirrorthelight

oh yeah, forgot about buying the rate down...good call pjny
who cares if you've been a pain in the ass...you are the customer and the loan officer should be doing all they can for your business!!!

eyedclaar

pjny wrote:

I'm the vice president of a wholesale mortgage brokerage. I deal with over 30 lenders including Chase and Wells Fargo. As of the last rate change of the day today, 5.0% for a 15-yr fixed COSTS almost half a point in discount fees. So yeah, you're probably paying for the rate. I don't know what he's charging you as a broker/origination fee, but it's certaily enough to cover the discount + his own fee (unless he's hiding something).

Also, the type of person who would tell you they wish they didn't pick up the phone or engage in the type of chewdown tactics you used instead of being straight up about the costs of the rate is probably not the type of person you really want handling the transaction. You have a salesperson, not a mortgage professional...and THAT's why you believe that you "grudgingly earned his respect."

Sorry charlito, but with what little info I have to go on, it's not looking so good. And as the title/escrow officer noted, the lowest (s)he's been seeing is 5.375% bc that's the closest to PAR rate as there's been on a 15-year in awhile.

Is that a patronizing tone I detect? Like I said, I'm no expert and I'm asking for advice. You sound like you know what you are talking about. So... I heard PAR dropped to 5.1 something just today. Basically, I have paperwork in place to pounce when it hits 5 flat. So I won't pay any fees. I should have made that more clear. This person is a salesperson. I knew that up front and is probably why I was so tenacious with them. Anyway, so I take it your credit score really doesn't matter that much? They will pretty much offer anyone with decent credit PAR? And is there any way around closing costs when you aren't doing the re-fi with the same lender?

PaperPlates

sorry I'm just a regular wizard

mookie blaylock 10

ringo wrote:

You can't go wrong with this plan:

Phase 1 - Collect underpants
Phase 2 - ?
Phase 3 - Profit

that is probably their funniest episode...the funniest bit, at least! the gnomes! great laugh!

coach4tl

eyedclaar wrote:

I am in the middle of researching a re-fi for my home and I am looking at doing a 15 year fixed loan. I currently have one lender talked down to a 5% flat fixed rate.

Now, I have a credit score over 800 and I want to know if that is about as good as I can expect or if I should keep pushing? My nature is to push... Also, despite my high credit score, I am the least responsible person I know and can offer no financial advice to anyone. In other words, I have no idea how I managed it; I somehow made it out of the lysergic mist with great credit. Probably all those cash transactions... But still, with my credit score, should I be more demanding?

Any help would be appreciated...

I work as a wholesale rep for a correspondent lender in the Bay Area and looking at my ratesheets today I can tell you I personally don't have anything at 5% on a 15 year fixed. Most of it is coming in at around .375 cost actually so like people are saying PLEASE be sure to check your Truth in Lending to make sure you're loan officer isn't doing somethin a little off center. You may also consider going straight to your personal bank and asking what they have to offer. Sometimes those rates can be a little better and you aren't dealing with some poor guy who is going to rape you on points just to keep his lights on.

brain of c

sponger wrote:

well I have an accounting degree and I'm an analyst at a fortune 400 money management firm. But neither of those things would be necessary for me to tell you that 5% fixed is a pretty damn good rate. Methinks that you were able to get such a good fixed rate because you agreed to what is essentially a short term loan.

Now, a friend of mine just bought a place with a 4.66% fixed rate and that's because she's been neck deep in the real estate industry for years. In fact, the place she bought was a short sale, so the whole situation had bargain written all over it.

Personally I think the market is going to bottom out like crazy over the next couple of years, so no matter what price you got right now, expect to see the value decrease very soon.

Interest rates are not supposed to be that low, and eventually they WILL come back up or else the dollar will devalue, and I don't think the fed will allow that to happen for very long.

Also, the government is going to step in and regulate the mortgage industry so that home loans will no longer be handed out like candy. This will also affect housing prices as demand decreases.

thank you mr. exposition.

SENROCK

eyedclaar wrote:

I am in the middle of researching a re-fi for my home and I am looking at doing a 15 year fixed loan. I currently have one lender talked down to a 5% flat fixed rate.

Now, I have a credit score over 800 and I want to know if that is about as good as I can expect or if I should keep pushing? My nature is to push... Also, despite my high credit score, I am the least responsible person I know and can offer no financial advice to anyone. In other words, I have no idea how I managed it; I somehow made it out of the lysergic mist with great credit. Probably all those cash transactions... But still, with my credit score, should I be more demanding?

Any help would be appreciated...

i believe u are looking to speak to JOEJOEJOE.

sponger

SENROCK! wrote:

i believe u are looking to speak to JOEJOEJOE.

Does the OP need his taxes done?

PJOceans11

For the credit score questions:

1. your credit score DOES matter now a days more than ever, specifically, since March 31st...If you credit score is under 740 and your loan to value is over 65%, Fannie Mae has new pricing adjustments in place that are risk based. Meaning the lower your credit score and higher your LTV, the higher interest rate you are offered.

2. Your credit score is phenominal and as long as you are looking for a conforming loan, it doesn't matter if you have 10 credit cards or 0.


As for the 5%, i agree with our Broker VP friend...i work for the largest mortgage banker in PA, NJ and DE and our 15 year fixed rates were at 5.5% today with 0 points. So 5% is well below market and well below PAR, meaning that if i closed a loan at that rate without charging any points, my company would have to pay to close that loan, which is terrible business.

Honestly, i would just be careful - it sounds like your rate is floating, so you are waiting for rates to come down to 5% so you can lock in. If you are doing this, you are going to be waiting for a while. If you are locked in at 5% and paying less than $1000 in mortgage fees (appraisal, application, credit, flood cert, tax service), i would sign those closing docs ASAP.

hope this helps...

PJOceans11

coach4tl wrote:

I work as a wholesale rep for a correspondent lender in the Bay Area and looking at my ratesheets today I can tell you I personally don't have anything at 5% on a 15 year fixed. Most of it is coming in at around .375 cost actually so like people are saying PLEASE be sure to check your Truth in Lending to make sure you're loan officer isn't doing somethin a little off center. You may also consider going straight to your personal bank and asking what they have to offer. Sometimes those rates can be a little better and you aren't dealing with some poor guy who is going to rape you on points just to keep his lights on.

i agree, go to a mortgage banker, or your own bank...brokers losing their outlets by the second, and i wouldn't trust them.

given2fly78

eyedclaar wrote:

I am in the middle of researching a re-fi for my home and I am looking at doing a 15 year fixed loan. I currently have one lender talked down to a 5% flat fixed rate.

Now, I have a credit score over 800 and I want to know if that is about as good as I can expect or if I should keep pushing? My nature is to push... Also, despite my high credit score, I am the least responsible person I know and can offer no financial advice to anyone. In other words, I have no idea how I managed it; I somehow made it out of the lysergic mist with great credit. Probably all those cash transactions... But still, with my credit score, should I be more demanding?

Any help would be appreciated...

Take it and run.

I do mortgages (A paper, not subprime) and if you have a loan to value that is typically below 90% and credit scores above 700, rates are what they are. To get an idea of where rates are going, I watch the 10 year treasury like crazy, as well as the DOW and NASDAQ. So it's not credit score based like credit cards where you can negotiate due to FICOS. Just see if you are paying points. I know in NY (and we tend to run high) we have nothing near a 5% Fixed with 0. Good Luck!

JOEJOEJOE

SENROCK! wrote:

i believe u are looking to speak to JOEJOEJOE.

Thanks for the faith in me, but all I can say is make sure they aren't charging points, or some other phoney-baloney fees to make-up for the low rate.

Also, keep in mind that points paid on a refi are not fully deductible in the year incurred...you amortize them over the life of the loan.

Shawn Smith Collective

eyedclaar wrote:

Is that a patronizing tone I detect? Like I said, I'm no expert and I'm asking for advice. You sound like you know what you are talking about. So... I heard PAR dropped to 5.1 something just today. Basically, I have paperwork in place to pounce when it hits 5 flat. So I won't pay any fees. I should have made that more clear. This person is a salesperson. I knew that up front and is probably why I was so tenacious with them. Anyway, so I take it your credit score really doesn't matter that much? They will pretty much offer anyone with decent credit PAR? And is there any way around closing costs when you aren't doing the re-fi with the same lender?

Haha, it might have been a little patronizing, sorry.

Some of the posts that followed mine echoed a similar opinion, so please keep that in mind here...people in the industry with no personal gain in your transaction are essentially warning you: "if it's too good to be true..."

PAR is the rate at which it doesn't COST points to buy the rate, and it doesn't pay a premium YSP to the broker from the lender. Sometimes, the par rate costs/pays very little, but it's the closest to zero. Par opened around 5.50% today and dropped to 5.375% around 1:30-2:00pm. There were no further pricing changes, so 5.10 is definitely not accurate.

As someone else mentioned, 5.0% flat is not likely to happen unless you're paying discount points. Also mentioned was that the lender/broker isn't going to pay for your points and do your mortgage for free...it makes no sense...so proceed with extreme caution if you're under the impression that you're not paying.

As for closing costs...there's no way around closing costs for a standard refinance. You can (for the most part) avoid mortgage tax with a CEMA. You can also cut your title insurance premium virtually in half with a reissue rate, if you've taken your previous mortgage within the past 10 years.

Since you're refinancing, let me ask you this...what's your purpose in taking a 15-year term? What do you have now? Are you planning to see this loan to the end of the term, or do you plan to sell the house or refi again for cash-out prior to the term of the loan? I ask bc depending on your answers, you may be throwing money away in higher payments (due to shorter term) just to have a more attractive interest rate.

The reason for any condescending tone earlier is bc sometimes a borower's determination to bulldog loan officers into the "best deal" actually sets them up to be taken for a ride. The reason is that an honest broker won't just tell you what you WANT to hear, but the guy who doesn't really care about anything except closing a deal and getting paid will tell you whatever it takes to get to the closing table and will then bust his ass to get you to close on different terms. For example, 5% no points. It's just frustrating sometimes. :(

Shawn Smith Collective

Just to note, rates were just released and it is VERY INEXPENSIVE to buy 5.125% for 30-days. 5.0% still costs almost half a point though.

eyedclaar

pjny wrote:

Haha, it might have been a little patronizing, sorry.

Some of the posts that followed mine echoed a similar opinion, so please keep that in mind here...people in the industry with no personal gain in your transaction are essentially warning you: "if it's too good to be true..."

PAR is the rate at which it doesn't COST points to buy the rate, and it doesn't pay a premium YSP to the broker from the lender. Sometimes, the par rate costs/pays very little, but it's the closest to zero. Par opened around 5.50% today and dropped to 5.375% around 1:30-2:00pm. There were no further pricing changes, so 5.10 is definitely not accurate.

As someone else mentioned, 5.0% flat is not likely to happen unless you're paying discount points. Also mentioned was that the lender/broker isn't going to pay for your points and do your mortgage for free...it makes no sense...so proceed with extreme caution if you're under the impression that you're not paying.

As for closing costs...there's no way around closing costs for a standard refinance. You can (for the most part) avoid mortgage tax with a CEMA. You can also cut your title insurance premium virtually in half with a reissue rate, if you've taken your previous mortgage within the past 10 years.

Since you're refinancing, let me ask you this...what's your purpose in taking a 15-year term? What do you have now? Are you planning to see this loan to the end of the term, or do you plan to sell the house or refi again for cash-out prior to the term of the loan? I ask bc depending on your answers, you may be throwing money away in higher payments (due to shorter term) just to have a more attractive interest rate.

The reason for any condescending tone earlier is bc sometimes a borower's determination to bulldog loan officers into the "best deal" actually sets them up to be taken for a ride. The reason is that an honest broker won't just tell you what you WANT to hear, but the guy who doesn't really care about anything except closing a deal and getting paid will tell you whatever it takes to get to the closing table and will then bust his ass to get you to close on different terms. For example, 5% no points. It's just frustrating sometimes. :(

Frustrating and confusing. Again, thanks for the information. Basically, I'm thinking of selling my house in about 3 years, so I wanted to start paying down the principal in order to get more money back when I sell.... I'm totally fixing up the joint as well. Also, the (proposed) new deal/numbers hardly seem to be increasing my monthly payment, so I figured why not have a 15 year loan instead of a 30 if I can afford it...

So PAR probably won't hit 5% flat, eh? That sucks. I may have to track this guy down...

eyedclaar

pjny wrote:

Just to note, rates were just released and it is VERY INEXPENSIVE to buy 5.125% for 30-days. 5.0% still costs almost half a point though.

Thanks for the update!

PJOceans11

given2fly78 wrote:

Take it and run.

I do mortgages (A paper, not subprime) and if you have a loan to value that is typically below 90% and credit scores above 700, rates are what they are. To get an idea of where rates are going, I watch the 10 year treasury like crazy, as well as the DOW and NASDAQ. So it's not credit score based like credit cards where you can negotiate due to FICOS. Just see if you are paying points. I know in NY (and we tend to run high) we have nothing near a 5% Fixed with 0. Good Luck!

you should watch the fnma 30 year bonds, not the 10 year treasury. often times they move in opposite directions and it is actually the 30 year bonds that move mortgage rates - not the 10 year.

just a tip.

PJOceans11

eyedclaar wrote:

Frustrating and confusing. Again, thanks for the information. Basically, I'm thinking of selling my house in about 3 years, so I wanted to start paying down the principal in order to get more money back when I sell.... I'm totally fixing up the joint as well. Also, the (proposed) new deal/numbers hardly seem to be increasing my monthly payment, so I figured why not have a 15 year loan instead of a 30 if I can afford it...

So PAR probably won't hit 5% flat, eh? That sucks. I may have to track this guy down...

If i locked in a 15 year at 5% today, my company would make .125 pts. Our normal margin is 1.625 points, so 5% is a little bit above PAR today for my company...(correspondant banker)

given2fly78

eyedclaar wrote:

Frustrating and confusing. Again, thanks for the information. Basically, I'm thinking of selling my house in about 3 years, so I wanted to start paying down the principal in order to get more money back when I sell.... I'm totally fixing up the joint as well. Also, the (proposed) new deal/numbers hardly seem to be increasing my monthly payment, so I figured why not have a 15 year loan instead of a 30 if I can afford it...

So PAR probably won't hit 5% flat, eh? That sucks. I may have to track this guy down...

If you are selling your home in 3 years are you sure you should refinance?

You are probably paying closing costs all over again. Even though the rate looks great, how long will it take for you to recoup those closing costs and truly start saving money?

I can't tell you how many clients I've talked out of refinancing. People see a great rate, but won't be in the house long enough to recoup the closing costs. OR we don't see a big enough reduction to justify it either.

eyedclaar

given2fly78 wrote:

If you are selling your home in 3 years are you sure you should refinance?

You are probably paying closing costs all over again. Even though the rate looks great, how long will it take for you to recoup those closing costs and truly start saving money?

I can't tell you how many clients I've talked out of refinancing. People see a great rate, but won't be in the house long enough to recoup the closing costs. OR we don't see a big enough reduction to justify it either.

Well now I'm not sure. Thanks a lot! Kidding. Nothing is set in stone, which is good, bu I'm starting to feel like I should go back to the drawing board here and rethink my plans.

Thanks (for real this time)!