Adjusting rates on FHA loan question...

Guest 0.10 Dollars($)

I was told by my mortgage specialist that by getting an FHA loan (about to close in Dec), that at anyime (after 3 months has passed) if the rates come down I can do a modification to my loan to bring down the rate. There are no closing costs or fees involved. Is this right? If so, where can I go to do more research on this topic (i.e. watch rates, what the process is, etc)?

chrisburns · Posted: Tue Nov 11, 2008 11:15 am Post subject:

Sounds like a Streamlined FHA refinance.

No appraisal required
low documentation

main requirement is that it lower your interest rate.

Interest rates are pretty low right now so I'm not sure why he would be pitching that to you. Rates are in the 5% range still.

Guest 0.10 Dollars($)

I'm doing a FHA loan because we're putting 3% down on a $325K home and he said it would be less painful doing the PMI this way as its a more forgiving loan. The rate he's giving me now is about 6.5 so I don't know where 5% is coming...I haven't see loans (for the average person) at that level in Massachusetts....but maybe my guy jsut sucks...I hope not...he's my husband's cousin and has been doing this for a while!! Surprised

)

chrisburns · Posted: Tue Nov 11, 2008 12:44 pm Post subject:

I agree with him that an FHA loan is probably the most beneficial way to go for you.

You should definatley haggle with him on the interest rate however. I bet he will be able to come down a bit for you Smile

Guest 0.10 Dollars($)

Yeah...I would think he'd have more room to bend since he's giving me "family" rates...but maybe he doesn't like us!! haha

Thanks for your input!

chrisburns · Posted: Tue Nov 11, 2008 1:29 pm Post subject:

Yes. For example the par rate yesterday was 5.875%.

Maybe you have some hits for credit scores or something on there?

Caron · Posted: Wed Nov 12, 2008 4:48 am Post subject:

Hi heffa,

What the lender has probably told you is that you can refinance and get a lower rate once market rates go down. Usually there are closing costs to be paid when you refinance. But for streamline refinances, lenders do offer no cost loans. But rates of such loans could be higher than those which require you to pay the closing costs. So, just check out for the loan offer and the rates applicable before you go for one.

A loan modification is different than refinance. Check out the page on loan modification and get an idea on what it's all about.

Good luck

Guest 0.10 Dollars($)

nope...our credit is pretty good. My score is 779 and my hubbys is 730-something. So I think we're credit worthy, but maybe rates are different in different parts of the country?

Thanks Caron for your input too.

jameshogg · Posted: Fri Nov 14, 2008 1:36 am Post subject:

Hi heffa!

As far as I know, the credit scores given by the credit bureau do not vary from one state to another.

Thanks

All times are GMT - 7 Hours

Page 1 of 1