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sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

Hi,

I have question regarding mortgage rate, when i contacted bank of america and other company, they are telling today's rate is around 4.6 with excellent credit and zero debts if qualified for mortgage. But when i went and google from some sites ( linked from reliable sites such as bankrate.com) many are showing very low rates,
example: atlantic mortgage said they have for 4.25 rate with zero points and zero lender fee
Am i missing something?
even in many sites like bankrate are showing average rate for today is around 4.6%

chrisgummerson · Posted: Mon May 09, 2011 1:44 pm Post subject:

Rates are really low for this week. The terms to your scenario is specific to your case. I would not be able to tell you what is in the market for you, as I dont know your state, loan amount, credit, income, ect. When you are looking at rates, you also want to look at the APR, which is the total cost of the loan, including your closing costs. One bank might tease you with a lower note rate, but their apr is higher than another bank. What state are you located in? You can reply for more discussion. Good luck!

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

For some reason , my message is not getting posted. I live in northern virginia area, my credit score is around 800 and i have income around 90k

chrisgummerson · Posted: Mon May 09, 2011 4:04 pm Post subject:

Hi,

Each bank send their loans to the same places, either FHA, Fannie Mae or Freddie Mac. Each bank you talk to works on the same similar set of guidelines. That being said, each bank has different fees, over head, and other investor guidelines that can change the rate you qualify for. Again, it is more important to look at the APR associated with the rate you are quoted. The least amount of difference between the rate and APR rate, determines a low cost. If the difference is higher, then you are paying more to obtain this rate from this lender. Each bank again, will have same programs, but different rates. If you think you will refinance, you can opt for the lowest monthly payment, likewise, if you want to payoff this loan, you want the cheapest total cost, which is the APR...

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

So that means if i dont have plan to refinance ( assuming rate will not got lower than current rate), i need to see what is the apr and compare apr instead of rate. Finally, i need to go by lowest apr.
One thing i did not understand is why is rate + costs =apr. Usually i thought rate and apr related to interest per month or per annum. Is cost =closing cost here?

Posted: Tue May 10, 2011 12:35 am Post subject:

Yes, here cost basically means closing costs.

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

If i take FHA loan on amount say 360k (house price 375), is there any way to know what would be monthly FHA insurance i need to pay?

jameshogg · Posted: Tue May 10, 2011 11:12 pm Post subject:

Hi sburugu,

You can contact the insurance agent in order to know what your monthly FHA insurance payments will be like.

Thanks

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

its coming out (loanamount*1.15)/12

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

Did anyone got loan from 'atlanticmortgage', any reviews/experiences would be appreciated. From their first hand quote i see that they are pretty better than bank of america but not sure if they charge anything extra

Posted: Wed May 11, 2011 12:23 pm Post subject:

You’re certainly not getting much play on your follow-on question. Answers is simple but you may wish to jot down a quick Excel sheet. I am assuming that the $360K mortgage is within the FHA maximum for the area, mortgage is has 30-year term, and that the appraised value is at least $375K.

Your upfront MIP will be $3,600 and is typically fully financed (on top of the $360K you mentioned. YOU’RE STILL PAYMENT THIS THOUGH!

Monthly MIP is a little trickier in that you are very close to 5% down payment; At 5% down, the monthly MIP rate drops 5 bps but lets assume the deal is as presented and you pay 1.15% month MIP or .0115/12 per month. The dollar amount is calculated on the average scheduled outstanding base loan balance (exclusive of financed up front MIP and inclusive of the original amount) but you can overestimate the monthly amount by multiply the base loan amount ($360K in your example) by 1.15% and dividing by 12. At 4.25% the monthly MIP would be $342.35 and would increase only slightly within the range of reasonable note interest rates, e.g., at 4.50% the amount would be $342.47.

The monthly MIP rate increased 4/18 and unless your credit is trash, you may wish to look at 5% conventional… or even going to 5% down on a FHA.

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

1) I am assuming appraised value will be around 355k to 360k, will this be a problem?
And also in your case, if i do 5% down, you said it will decreased by 5bps, how much it would be for 360k loan?
10% conventional is 3.5% interest rate but still has PMI ( around 160$ which is almost half of FHA, which is good0

Posted: Thu May 12, 2011 10:44 pm Post subject:

If you're going for a conventional loan, you'll be liable for paying 20% down payment in order to get a mortgage. If you can't do so, then you'll be liable for paying the PMI. If you go for FHA loan, then you will be liable for paying 3.5% down payment.

sburugu · Joined: 23 Feb 2011 Posts: 15 4.34 Dollars($)

Yes thats right, but with conventional loan and 10% down, PMI is less than half of the FHA loan. Is there any specific advantages for FHA other 3.5% downpayment?

Posted: Mon May 16, 2011 2:04 am Post subject:

Interest rates will be low and you will require a low credit score in order to qualify for a FHA loan.

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