Refinance Mortgage

I am looking to refinance my 5 yr ARM (coming up in June) to a 30 yr fixed rate mortgage. My current lender is offering 4.5% with 3 points. A local lender in the area is offering 4.5% with .75 points. Do you think these are good rates? It’d be easier to stay with current lender but there is a big spread in the points….any suggestions? Do you think I should hold out and rates will come down even more?

The rates could come down more but it is unlikely. With the rate being as AMAZING as it is right now I wouldn’t hold off much longer. I would ditch the ARM AS SOON AS POSSIBLE and go with a fixed rate. Even if the fed comes down even lower in their rates it’s not going to be much more, they just can afford to do that. Get rid of the ARM that you have and pick the better choice in those lenders offers. Don’t worry about the paperwork, who care’s about that? Save yourself a lot of money and go with the better choice! You’ll save a ton of money in the long run! Good Luck and Happy Holidays!

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There is no standard answer, as rates change daily. It depends on how aggresive the bank wants to be, and the loan officer. When comparing rates, you should do so on the same day. The 2 important questions you need to ask is the rate on that specific day, and the amount of ALL closing costs. A lot of lenders (particularly brokers and on-line mortgage companies) only include THEIR closing costs, and not outside 3rd party costs such as attorney fees, title insurance, recording fees, appraisals. etc.

Hi there, I need some quick help.
I managed to get 2 options for mortgage rates-

1) Fixed 25 year for 3.74% for 4 years

OR….

2) variable of 2.45%, 25 years

I know that if the economy gets better, variable might be dangerous. What do you guys suggest?

Neither of those deals sound legit, best fixed rate loans are 25 year terms are around 4.75% if you’re paying like 1.5pts. Average is around 5.125%. 5/1ARMs are around 3.75% with 1pt at best. If the price of gas is $2.20 on average around your area and 1 place is advertising .50/gal you know something isnt right. No one is that cheap. Call a few major lenders and they’re verify what I’m telling you.

I have been maintaining my bank account with bank "A" from past 8 years and having been maintaining it with good stand.
I have a good fico and 20% down payment and wante to buy a home.

I wanted to shop for the best mortgage banks which can lend me loan for my home with the lowest interest rate including fees and everything.

So does the bank "A" where I have been holding account would give me better rate compared to other banks since they have my info and other things ? or doesn’t matter ?

I’d like to think it would work that way, but it doesn’t. In most banks they are completely unrelated departments and they don’t talk to each other. You would be better served by shopping around for the best deal for you and if happens to be from your bank, so be it, but it likely won’t be with the same bank.

good luck!

My wife and I are looking to buy a home in the near future. What is the best rate that we should expect? We have great credit and even better street cred.

I know you have vastly different mortgage options in the US over what we have here in Canadam, but I would caution against some of them.

Avoid amortizations over 25 years – I know they give you a better monthly payment, but you are paying way more in interest and leaving yourself vulnerable if prices go down.

Avoid interest only mortgages, since you are only ever paying interest, never principal, thus you are not paying off your mortgage at all.

Avoid cash back mortgages, you get a higher rate in return for money up front, meaning more interest is being paid – by you!

Avoid anything over 100% financing, you are just asking for trouble if prices ever drop.

Get a nice and simple 5-year term with a 25-year amortization and stay in the safe zone. You have got to be able to get that with a rate in the 5.5-6.5% range.

And don’t be afraid to shop around, make the banks work to get your business!

Laurin Jeffrey
Toronto Condos and Lofts
www.jeffreyteam.com

I have bought and sold 1 home and currently own a home. My wife and I use credit card for as many purchases to gain cash back as we can but pay off at end of month. Bills are always paid on time. Some "old dogs" credit cards still appear open on my credit report but no balance, etc. What is the "cutoff" credit score for getting the best mortgage rate possible?

At 750, you are in great shape (credit scores go up to 850). Generally for mortgage lending, once you are over 720 you are in the top tier.

Leave the ‘old dogs’ alone, you could actually hurt your score by closing them. Continue making payments on time, moderately use your available credit, and avoid any unnecessary credit inquiries (you can check your own credit without issue).

Also, try visiting www.optoutprescreen.com. This is a service that removes you from the pre-screened credit solicitations and has been known to improve scores from 5-25 points.

I am a mortgage advisor and deal with credit issues all day long. Keep up the good work!

I am currently looking for a new 2 or 3 year fixed rate mortgage deal. My previous deal of 4.65% expires at 1st Dec. (This is with the Alliance and Leicester ). The best deal I can find is a 5.87% deal with the same lender but there is a £599 product fee , a £250 admin fee (How does this work I already have a mortgage with them ) and various transfer fees so it will cost around £800 to keep my mortgage with the same building society I’m already with.

Does anybody know of any good deals without huge admin and joining fees that I’ve missed as most disappointingly the Alliance and Leicester deal is the best I can find.

Thanks for your help

Yep, the lower the %% the higher the ‘application fees’ …

I used Charcol to find the best deals and spreadsheeted the results on a ‘per year’ cost basis .. (so, for example, a £300 fee spread over 3 years = an extra £100 per year)

I found that 3 or 5 year deals are ‘best’ … the fees of 2 years deals are spread over too short a time to make it worth while …

I’ve been told by my Sales manager that rates are sent to Fannie Mae on Wednesday, so Friday is the best day to lock in a rate. But when I spoke to the loan officer, she said rates are collected everyday and it doesn’t matter which day you lock in.

Rates sheets are available daily from lenders. When your rate is available for the term you are looking for get locked in.

Remember rates can and do change daily and sometimes during the day, "playing the lock in game" has hurt many borrowers. It is better to lock in a rate that is acceptable then to float and possibly lose a rate.

I have a FICO score of 620 and My husband’s is about 650. We have obviously had some things that hit it, but we will have everything paid off and 0 debt when we apply for a mortgage. What do you think the best interest rate would be I think the low interest rate around here right now is about 5.8?

The best thing you can do is to contact at least three local mortgage brokers to get a quote. There are too many variables and caveats to give you an accurate answer here.

I am looking at borrowing $500000 and would like to know how to find the best interest rate for the mortgage.

ARM typically will have a lower introductory interest rate. If you definitely plan on selling your home within 5 years, then an ARM would probably be the choice for you.

After the 5 years, however, the rate may jump into double digit percentages, which can be a shocking surprise.

A 30-year fixed rate has the advantage of always knowing you’ll have the same monthly mortgage payment all the way. It typically will have a higher interest rate than the ARM.