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Alerik
Sir Postalot
Joined: 13 Oct 2002
Posts: 1375
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Ashenor
RealPoor Sensei
Joined: 14 Oct 2002
Posts: 1539
Location: Metro Detroit
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 Posted: 03/12/04 - 13:16 Post subject:
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I rip people for a living, let me know if you want to know anything on rates =).
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Paco
RealPoor Jedi
Joined: 13 Oct 2002
Posts: 12939
Location: Jacksonville, FL
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Posted: 03/12/04 - 14:05 Post subject: Re: mortgages rates..
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you're obviously not a finance major
hahaha
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 14:07 Post subject: Re: mortgages rates..
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| Paco wrote: |
you're obviously not a finance major
hahaha |
explain ....
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Paco
RealPoor Jedi
Joined: 13 Oct 2002
Posts: 12939
Location: Jacksonville, FL
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Posted: 03/12/04 - 14:12 Post subject:
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I would if I could, but I'm not a finance major either. I do know that what you think you're getting isn't the same as what was posted as 4.78xxxx%, your number will change, and you prolly got charged more on other things, like points and stuff...
I know that when I got mine, I got it at 4.5%, whatever the lowest was...and with no points, or other b******t..
the lenders can make a number sound real good, but it's the other factors involved where they get you..trust me, if it's too good sounding, there's a catch, always.
i could be wrong, but chances are not in your favor with regards to banks and money, hehe
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 14:26 Post subject:
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| Paco wrote: | I would if I could, but I'm not a finance major either. I do know that what you think you're getting isn't the same as what was posted as 4.78xxxx%, your number will change, and you prolly got charged more on other things, like points and stuff...
I know that when I got mine, I got it at 4.5%, whatever the lowest was...and with no points, or other b******t..
the lenders can make a number sound real good, but it's the other factors involved where they get you..trust me, if it's too good sounding, there's a catch, always.
i could be wrong, but chances are not in your favor with regards to banks and money, hehe |
The numbers listed on the usbank website are pretty cut and dry.
Well anyways i know i just locked in my 5 year arm at 3.75% without paying any extra fees or buying any points. in fact we locked in before the Unemployment numbers came out at 4 1/8 . the numbers came out lower than expected and the rate dropped . my mortgage guy felt bad and took the $500 it cost to get out of the lock off the loan origination fee.
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Paco
RealPoor Jedi
Joined: 13 Oct 2002
Posts: 12939
Location: Jacksonville, FL
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Posted: 03/12/04 - 14:31 Post subject:
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| Brash wrote: | | Paco wrote: | I would if I could, but I'm not a finance major either. I do know that what you think you're getting isn't the same as what was posted as 4.78xxxx%, your number will change, and you prolly got charged more on other things, like points and stuff...
I know that when I got mine, I got it at 4.5%, whatever the lowest was...and with no points, or other b******t..
the lenders can make a number sound real good, but it's the other factors involved where they get you..trust me, if it's too good sounding, there's a catch, always.
i could be wrong, but chances are not in your favor with regards to banks and money, hehe |
The numbers listed on the usbank website are pretty cut and dry.
Well anyways i know i just locked in my 5 year arm at 3.75% without paying any extra fees or buying any points. in fact we locked in before the Unemployment numbers came out at 4 1/8 . the numbers came out lower than expected and the rate dropped . my mortgage guy felt bad and took the $500 it cost to get out of the lock off the loan origination fee. |
cool, i hope so
but i'd ask a finance person that's not related to this deal, see what they say
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 14:39 Post subject:
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| Paco wrote: | | Brash wrote: | | Paco wrote: | I would if I could, but I'm not a finance major either. I do know that what you think you're getting isn't the same as what was posted as 4.78xxxx%, your number will change, and you prolly got charged more on other things, like points and stuff...
I know that when I got mine, I got it at 4.5%, whatever the lowest was...and with no points, or other b******t..
the lenders can make a number sound real good, but it's the other factors involved where they get you..trust me, if it's too good sounding, there's a catch, always.
i could be wrong, but chances are not in your favor with regards to banks and money, hehe |
The numbers listed on the usbank website are pretty cut and dry.
Well anyways i know i just locked in my 5 year arm at 3.75% without paying any extra fees or buying any points. in fact we locked in before the Unemployment numbers came out at 4 1/8 . the numbers came out lower than expected and the rate dropped . my mortgage guy felt bad and took the $500 it cost to get out of the lock off the loan origination fee. |
cool, i hope so
but i'd ask a finance person that's not related to this deal, see what they say |
finance person is a friend of my realtor/girlfriend. my boss just used him and never had any problems at all ...
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Confused
RealPoor Master of Posts
Joined: 08 Feb 2004
Posts: 6730
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Posted: 03/12/04 - 15:04 Post subject:
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I'm in love with ARM loans. I refinanced last year with a 3/1 ARM @ 3.5%. Since I then had the intention of selling between 1-2 years, I didn't worry about the adjustability of it kicking in after 3. I had a pleasant surprise upon receiving my statements, though. About 36% of each payment (before property taxes) actually goes to equity! With a conventional loan, you only get like 1% until you're 10 years in or so. Given the lower payments and increased equity, the refinance paid for itself within only about 3-4 months. I'm definately going to use a 5/1 ARM for the next house I buy.
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 15:26 Post subject:
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i just know i wont live here for more than 5 years
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kireol
RealPoor Master of Posts
Joined: 02 Aug 2003
Posts: 9517
Location: Royal Oak, MI
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Posted: 03/12/04 - 16:15 Post subject:
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Arms are good. interest only is WAY better if you are living there only a few years.
Go to any amortization table and look how much principal is reduced in the first few years. and then think of the WAY higher payment a P&I payment is
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 16:44 Post subject:
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| kireol wrote: | Arms are good. interest only is WAY better if you are living there only a few years.
Go to any amortization table and look how much principal is reduced in the first few years. and then think of the WAY higher payment a P&I payment is |
well i looked at it like this . i wont notice paying the extra $200 a month that goes to the principal but in 5 years i will notice the extra $12,000 i have in the bank. also the intrest only loans are normaly like 1/4 a point more .
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Darius
Luke Warm
Joined: 16 Dec 2002
Posts: 203
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Posted: 03/12/04 - 16:47 Post subject:
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| Brash wrote: | | Paco wrote: | I would if I could, but I'm not a finance major either. I do know that what you think you're getting isn't the same as what was posted as 4.78xxxx%, your number will change, and you prolly got charged more on other things, like points and stuff...
I know that when I got mine, I got it at 4.5%, whatever the lowest was...and with no points, or other b******t..
the lenders can make a number sound real good, but it's the other factors involved where they get you..trust me, if it's too good sounding, there's a catch, always.
i could be wrong, but chances are not in your favor with regards to banks and money, hehe |
The numbers listed on the usbank website are pretty cut and dry.
Well anyways i know i just locked in my 5 year arm at 3.75% without paying any extra fees or buying any points. in fact we locked in before the Unemployment numbers came out at 4 1/8 . the numbers came out lower than expected and the rate dropped . my mortgage guy felt bad and took the $500 it cost to get out of the lock off the loan origination fee. |
Funny, your mortgage guy lied to you. I have never heard of a fee to get out of a lock. I work in the mortgage business and locking is my specialty. In most instances you (the borrower) shouldn't be concerned about the lock process. When a loan originator locks a loan in they make money on the back end of the deal, you never see the amount of money they make. Also if you were paying an origination fee you might have paid for a lower rate, it might have been included in the origination. There are so many ways to structure a loan that they could tell you that you aren't paying for a lower rate but actually you are. They could hide it in underwriting fees, processing fees, administrative fees or some BS fee they made up. If you guys have any questions about mortgages feel free to send me a pm or post and I’ll try my best to answer your questions.
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 17:12 Post subject:
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| Darius wrote: | | funny, your mortgage guy lied to you. I have never heard of a fee to get out of a lock. |
So can lock in a rate over and over as long as the rate goes down for free ?
question then. once you lock in your rate with the bank you can walk away and go to another bank if they have a cheaper rate and have the first bank charge you nothing ?
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Darius
Luke Warm
Joined: 16 Dec 2002
Posts: 203
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Posted: 03/12/04 - 17:28 Post subject:
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| Brash wrote: | | Darius wrote: | | funny, your mortgage guy lied to you. I have never heard of a fee to get out of a lock. |
So can lock in a rate over and over as long as the rate goes down for free ?
question then. once you lock in your rate with the bank you can walk away and go to another bank if they have a cheaper rate and have the first bank charge you nothing ? |
Right, you have no commitment to a lender. The only thing that they can really charge you for is the credit report or appraisal if you pull your loan. In most cases you don't even have to pay for that unless you sign an agreement that says you will if your loan doesn't go through.
Edit: I am speaking from my experiance in CO and MN. Some states may be differant but I am assuming that most states are regulated the same.
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Darius
Luke Warm
Joined: 16 Dec 2002
Posts: 203
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Posted: 03/12/04 - 17:36 Post subject:
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OOPS
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 17:47 Post subject:
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| Darius wrote: | | Brash wrote: | | Darius wrote: | | funny, your mortgage guy lied to you. I have never heard of a fee to get out of a lock. |
So can lock in a rate over and over as long as the rate goes down for free ?
question then. once you lock in your rate with the bank you can walk away and go to another bank if they have a cheaper rate and have the first bank charge you nothing ? |
Right, you have no commitment to a lender. The only thing that they can really charge you for is the credit report or appraisal if you pull your loan. In most cases you don't even have to pay for that unless you sign an agreement that says you will if your loan doesn't go through.
Edit: I am speaking from my experiance in CO and MN. Some states may be differant but I am assuming that most states are regulated the same. |
ok i guess i thought once you locked in your rate with a bank you entered a contract with them to get a loan at thier bank. in turn they lock in a rate for you. a contract you can get out of for a fee.
so here is the thing i dont get then. we bought our house 90 days from our closing date. dude told us we had to wait till we were within 60 days to lock in the rate to avoid paying a fee for an exstended lock. then after the 60 days were up he kept telling us to wait to lock in because rates could drop. they did drop by like 3/4 point. but why would he have us wait to lock in after we were within the 60 days when we can just keep relocking the loan every time it drops ?
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Darius
Luke Warm
Joined: 16 Dec 2002
Posts: 203
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Posted: 03/12/04 - 18:24 Post subject:
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Locking a loan is kind of like gambling. The rates change everyday. When a loan is locked under a certain loan program we expect the loan to close and fund the way the loan was locked. At my company we will allow an originator to change the interest rate but they have to use the pricing of the day they originally locked the loan. We don't charge for changing the interest rate. If an originator wants to change the loan program they also have to use the pricing from the day they originally locked the loan.
If pricing is better a week after a loan is locked the originator is out of luck. Fifteen days after a lock expires they can then relock the loan at current market pricing.
You as a borrower shouldn't have to worry about the lock process. If the originator can't get you what you want go to someone else. I guarantee that there is a loan program out there for you and there is someone that will do your loan just to get the business. If your loan dude is talking to you about locking your loan he is a really bad sales person.
Last edited by Darius on 03/21/04 - 21:24; edited 1 time in total
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Ashenor
RealPoor Sensei
Joined: 14 Oct 2002
Posts: 1539
Location: Metro Detroit
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Posted: 03/12/04 - 20:54 Post subject:
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I just did a interest only loan for a client at 3.875 fixed for the first 3 years, and interest only for the first 10. This loan still paid me 1.2% yield spread at that rate.
That means par on that was around 3.375 or so.
Interest only loans are the way to go, next spring i will probably purchase a $300,000 - $400,000 house this way and apply a extra $200 - $300 towards principal each month.
After 5 years, i have the equity that my property went up, plus the $20,000 or so i have paid off on it.
My payment on this will be in the $800 to $950 a month range for interest only. So even with escrows and apply the extra money to it my payment will still come in under $1600 or so a month.
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Ashenor
RealPoor Sensei
Joined: 14 Oct 2002
Posts: 1539
Location: Metro Detroit
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Posted: 03/12/04 - 20:57 Post subject:
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Darius, there is a penalty for breaking a lock on a loan. Most banks add a 1/2 point to the rate or you can buy it out. A lot of times if the rate drops enough its worth taking the 1/2 pt hit and just relocking it.
That said i always have the option of just locking it at another bank and not taking the loan for the 1st bank.
One of the good things being a broker and working with lots of banks is having options like that.
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Ashenor
RealPoor Sensei
Joined: 14 Oct 2002
Posts: 1539
Location: Metro Detroit
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Posted: 03/12/04 - 21:00 Post subject:
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Oh ya if anyone wants to figure what a interest only payment on a loan is, here is the formula.
Loan amount * .0(rate) / 12 = monthly interest only payment.
Most of these are fixed for either a 3 or 5 year period, interest only for the first 10 years and amoraztied over a 30 year period.
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kireol
RealPoor Master of Posts
Joined: 02 Aug 2003
Posts: 9517
Location: Royal Oak, MI
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Posted: 03/12/04 - 21:04 Post subject:
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| Brash wrote: | | kireol wrote: | Arms are good. interest only is WAY better if you are living there only a few years.
Go to any amortization table and look how much principal is reduced in the first few years. and then think of the WAY higher payment a P&I payment is |
well i looked at it like this . i wont notice paying the extra $200 a month that goes to the principal but in 5 years i will notice the extra $12,000 i have in the bank. also the intrest only loans are normaly like 1/4 a point more . |
hence why i said "living there only a few years".
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Ashenor
RealPoor Sensei
Joined: 14 Oct 2002
Posts: 1539
Location: Metro Detroit
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Posted: 03/12/04 - 21:08 Post subject:
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Trust me kireol knows what he is talking about, why you are at home typing this he is at the office closing a deal making him $4,000 right now.
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Darius
Luke Warm
Joined: 16 Dec 2002
Posts: 203
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Posted: 03/12/04 - 22:21 Post subject:
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| Ashenor wrote: | | Darius, there is a penalty for breaking a lock on a loan. Most banks add a 1/2 point to the rate or you can buy it out. A lot of times if the rate drops enough its worth taking the 1/2 pt hit and just relocking it. |
At my company we don't charge the broker anything if they make a change to the rate or the loan program. Only thing that we require is they use the pricing from the day the actually locked the loan. A half seems like a big hit for making a change to a lock or rate. Is that the norm where you are from?
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/12/04 - 23:21 Post subject:
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my guy said 1/4 point for breaking the lock
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kireol
RealPoor Master of Posts
Joined: 02 Aug 2003
Posts: 9517
Location: Royal Oak, MI
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Posted: 03/12/04 - 23:55 Post subject:
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| Brash wrote: | | my guy said 1/4 point for breaking the lock |
yer guy is right. and with most companies, yer not only get 1/4 point for "breaking the lock" (taking too long) but you also get "worst price" rating. meaning you wont be able to get a lower rate with that bank. some banks allow you to get best price. flagstar for example is always worst price.
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Ashenor
RealPoor Sensei
Joined: 14 Oct 2002
Posts: 1539
Location: Metro Detroit
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Posted: 03/13/04 - 04:54 Post subject:
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Sorry it is 1/4 pt i typed it quick.
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Brash
RealPoor Guru
Joined: 20 Oct 2002
Posts: 3958
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Posted: 03/13/04 - 13:08 Post subject:
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well dont matter really if he is willing to pay it .....
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kireol
RealPoor Master of Posts
Joined: 02 Aug 2003
Posts: 9517
Location: Royal Oak, MI
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Posted: 03/13/04 - 13:10 Post subject:
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| Brash wrote: | | well dont matter really if he is willing to pay it ..... |
and why would he pay that? because you locked it and f****d up and you expect him to work harder for less money? nice
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