I get pre-qualified for a mortgage at a register rate of 5.75 and an APR of 6%. Good matter?
This is my first home, and I'm only putting 3% down. My credit score is around 700 (give or bear a few points). Should I shop around for a better APR? Or is this a good a deal?
Answers:
Since you are solely putting 3% down you better plan on staying in that home for 5+ years and you better be able to money your mortgage+insurance+property taxes. Knowing that property taxes rise every year.
I would be more concerned about ability to payment than your APR since you are putting so little down. Shaving off a basis point or two is meaningless within the grand scheme of things.
Given that you're putting smaller quantity than 20% down, 6% is a fair rate. Not great, but you're not getting screwed either.
I assume this is a fixed-rate mortgage?
If not, don't sign a article.
Okay, nobody know what APR means here... Here is the definition of APR:
APR is an expression of the cost the credit will cost you over the life of the loan as an interest rate. Example, if you enjoy two loans both with $1,000 payments for 30 yrs, and one is a loan for 98K and the other for 100K, the difference between them HAS to be the rate, as that drives the payment.
What be done, is that some of the fees in the GFE (Good Faith Estimate) were deem to be the same as paying interest - basically anything contained by the 800 section (aka lender fees, otehr than the appraisal, and certain 3rd shindig fees that have to be disclosed here, but are counted in) plus certain other fees, such as the closing excise, etc.
These are added up, and subtracted from the loan amount, and thus your APR is higher than the interest rate.
NOW>>>>>
The reason this be done, is because most people (95%+) are not sufficiently educated to apprehend a GFE. What happened was that if I sent one beside a rate of X and another lender a rate of Y, well at times looking at them, you cannot tell the difference between the offer, even those of us that know this, have a hard time doing so.
Your APR and rate are not stale that much, so you are, just by looking at those numbers getting a deal that looks only just fine. APR means nothing within this business, ineterst rate is what drives your payment and what you will pay over the time of the loan, not the APR. That was done to serve as an additional tool for general public to use for comparing offers, and to protect consumers from hidden costs, which I expect is a great use for consumers in general.
Now, most lenders today do not discriminate on down compensation for rate. That is usually a mortgage broker thing, and something that does not typically happen next to FHA or Flex programs, which I am guessing you are on.
Also, without knowing more, for instance, your income, and the whole profile of the settlement, I nor anyone else here can adive you if you are getting a good deal, but based on what the souk is doing right now, I would say you are.
A word of counsel - I have closed 2,173 mortgages since 1998, and that does not include seconds or lines of credit. Go ahead and shop, but next to the way the market is immediately, get your loan locked, and close it.
0.125 in rate difference for a 100K loan medium $8 in payment per month; at 150 K it's $12, at 200K $16, etc. Realize one item, rates are like gas prices, you have to paythem whether you resembling it or not. You will more than likely lose out if you expect rates to go down, or if you shop too much, and this comes from experience.
The most major thing is, can you HANDLE the payment including taxes, insurance, PMI and any other fees such as homeowner's Association dues, etc? If the answer is yes, after go with it, capture locked, and make sure you lock with plenty time for them to close the loan.
If you have 30 days to go, do a 45 morning lock, not a 30-day lock, too may things can go wrong, and then it would expire...
Hope that help.
ALSO, prequalifications mean nothing. They are not worth the serious newspaper they are written on, since your loan has not been approved. Source(s): Commercial & Residential Mortgage Consultant Since 1998
Depends on multiple factors. Is here mortgage insurance on this loan? Are you paying points? Etc? I am employed by one of the largest mortgage brokers in the country. We work with over 350 lenders to bring you the best rates and programs. I greeting the opportunity to help. Please feel free to shoot me an email anytime beside any questions you may have.
The rate is a little high because you are not putting down a average down payment.
It would help to put 10, but more importantly 20, the PMI insurance will be a throw away.
You might want to think about buying something smaller number expensive, it sounds like you can't afford this one.
my mom newly locked in at 6.875%, she is doing an 80/10/10 loan. her credit score is around 700. i would say that's good.
apt answers so far but it also depends on the tenor of the loan (# of years) and if you are paying any points, which you do not say.
Related Questions:
How can i re-finance an adjustable rate mortgage if my house won't appraise??
Your house will always appraise. Perhaps a moment ago not for what you want it to. You can re-fi if your house appraises for less than what you owe, but you'd only know how to borrow what it's...
Answers:
Since you are solely putting 3% down you better plan on staying in that home for 5+ years and you better be able to money your mortgage+insurance+property taxes. Knowing that property taxes rise every year.
I would be more concerned about ability to payment than your APR since you are putting so little down. Shaving off a basis point or two is meaningless within the grand scheme of things.
Given that you're putting smaller quantity than 20% down, 6% is a fair rate. Not great, but you're not getting screwed either.
I assume this is a fixed-rate mortgage?
If not, don't sign a article.
Okay, nobody know what APR means here... Here is the definition of APR:
APR is an expression of the cost the credit will cost you over the life of the loan as an interest rate. Example, if you enjoy two loans both with $1,000 payments for 30 yrs, and one is a loan for 98K and the other for 100K, the difference between them HAS to be the rate, as that drives the payment.
What be done, is that some of the fees in the GFE (Good Faith Estimate) were deem to be the same as paying interest - basically anything contained by the 800 section (aka lender fees, otehr than the appraisal, and certain 3rd shindig fees that have to be disclosed here, but are counted in) plus certain other fees, such as the closing excise, etc.
These are added up, and subtracted from the loan amount, and thus your APR is higher than the interest rate.
NOW>>>>>
The reason this be done, is because most people (95%+) are not sufficiently educated to apprehend a GFE. What happened was that if I sent one beside a rate of X and another lender a rate of Y, well at times looking at them, you cannot tell the difference between the offer, even those of us that know this, have a hard time doing so.
Your APR and rate are not stale that much, so you are, just by looking at those numbers getting a deal that looks only just fine. APR means nothing within this business, ineterst rate is what drives your payment and what you will pay over the time of the loan, not the APR. That was done to serve as an additional tool for general public to use for comparing offers, and to protect consumers from hidden costs, which I expect is a great use for consumers in general.
Now, most lenders today do not discriminate on down compensation for rate. That is usually a mortgage broker thing, and something that does not typically happen next to FHA or Flex programs, which I am guessing you are on.
Also, without knowing more, for instance, your income, and the whole profile of the settlement, I nor anyone else here can adive you if you are getting a good deal, but based on what the souk is doing right now, I would say you are.
A word of counsel - I have closed 2,173 mortgages since 1998, and that does not include seconds or lines of credit. Go ahead and shop, but next to the way the market is immediately, get your loan locked, and close it.
0.125 in rate difference for a 100K loan medium $8 in payment per month; at 150 K it's $12, at 200K $16, etc. Realize one item, rates are like gas prices, you have to paythem whether you resembling it or not. You will more than likely lose out if you expect rates to go down, or if you shop too much, and this comes from experience.
The most major thing is, can you HANDLE the payment including taxes, insurance, PMI and any other fees such as homeowner's Association dues, etc? If the answer is yes, after go with it, capture locked, and make sure you lock with plenty time for them to close the loan.
If you have 30 days to go, do a 45 morning lock, not a 30-day lock, too may things can go wrong, and then it would expire...
Hope that help.
ALSO, prequalifications mean nothing. They are not worth the serious newspaper they are written on, since your loan has not been approved. Source(s): Commercial & Residential Mortgage Consultant Since 1998
Depends on multiple factors. Is here mortgage insurance on this loan? Are you paying points? Etc? I am employed by one of the largest mortgage brokers in the country. We work with over 350 lenders to bring you the best rates and programs. I greeting the opportunity to help. Please feel free to shoot me an email anytime beside any questions you may have.
The rate is a little high because you are not putting down a average down payment.
It would help to put 10, but more importantly 20, the PMI insurance will be a throw away.
You might want to think about buying something smaller number expensive, it sounds like you can't afford this one.
my mom newly locked in at 6.875%, she is doing an 80/10/10 loan. her credit score is around 700. i would say that's good.
apt answers so far but it also depends on the tenor of the loan (# of years) and if you are paying any points, which you do not say.
Related Questions:
How can i re-finance an adjustable rate mortgage if my house won't appraise??
Your house will always appraise. Perhaps a moment ago not for what you want it to. You can re-fi if your house appraises for less than what you owe, but you'd only know how to borrow what it's...