Profile picture for BoulderHomeHunter

5.5% for 30 yer fixed for 275K FHA is fine ?

I am buying my first house. My credit score is around 730. Selling price 285 K, with seller paying 2K for closing. I pay 18K as down payment. FHA loan from my bank can be locked at 5.5% for 30 year fixed with no points. The bank charge an application fee of $395. They estimate the total closing fee as $2500.  Is the loan offer a good deal ?
  • July 06 2009 - Superior
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (5)

I work for a banker so our correspondant pricing shows 5.5% at a rebate of 2.678% today and thats with the price deterioration that occurred twice today...This means we make 2.678% in commission on the back end side. Usually a lender pays the originator a commission in exchange for a higher rate. What it looked like today was:

5% = .25% rebate
5.25% = .75% rebate
5.5% = 2.5% - 2.678%

5.5 is the sweet spot right now, where investors are paying a good chunk of commission. I am quoting 5.25% on FHA purchases right now, but it all depends on the scenario.


Its a good deal but I would see what the difference between 5% and 5.5% is in payment...if its worth it, which it is, tell your agent to come down to 5.25% or 5% and pay a small upfront origination instead of rebating the agent almost 3 points.

Just my opinion, call if you need help!
  • July 09 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for BoulderHomeHunter
 I did not realize  that they added the UFPMI  to the loan amount. For FHA it MI is 1.7% of the loan (~$4500). Now at 5.5, they are offering 2K as credit. (Or 5.375 with 0.25 points) . I chose 5.5 with 2K credit since it eases up my cash reserve situation.
  • July 09 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for SunTrust
I'll agree with Nic.  0 points would put you around 5.25% but 5.5% still is close.

FHA doesn't allow an application fee; perhaps it's a commitment fee?

The UFMIP alone is over $2,500 (even if its financed), it sounds like there are things missing from your estimate.
  • July 06 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

That's not a bad deal Boulder you may be able to get 5.25% with a little more shopping around.  Depending on how long you plan on staying in the residence you may consider trying to get a lower rate with perhaps half a point. Does the bank have a lower rate option with a bit more fees?
  • July 06 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Justin Kennedy
yes, rate and points sound right on. the closing cost sound a bit low. does the 2,500 and 2,000 (total 4,500) in seller credit include your new impound account, 1y hazard insurance premium, escrow, title.
double check. countless times i have seen impounds left off the good faith estimate.
  • July 06 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.