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Answers (12)
Best Answer
- Joe Cafiero, "Joe Cafiero"
- Contributions:3218
The reason you are being offered 4.25% is most likely b/c your loan officer is a moron and did not take into account that you are looking at 4 family homes thus the limits are higher (even if you were not that rate is too high). You should be looking at FHA rates around 3.75% and there should be a sizeable credit to help offset the closing costs you will have (and in the 5 boroughs they are sizeable).
Depending on who you are working with th 203k rate can be higher. Some banks do a lot of them and thus there rates are closer to your basic FHA rate.
You will need 20% down in order to go with a conventional loan which is why you are being steered to FHA in the first place.
If you would like to contact me through my profile, I can put you in touch with someone who can help you out that actually knows what he is doing.
- Norm D Plume, "America Needs Nixon!"
- Contributions:1670
Nicholas is new and confused, Reading (Pa) isn't in some bubble where it's the only place that a 4-unit residential property is considered commercial; it's residential there just like in the rest of the US.
Bob, I forgot to mention the NY mansion tax, pay over $1mm and you get a whole new hefty tax for the buyer to pay. Yeah, CA is a lot cheaper.
Bob, I forgot to mention the NY mansion tax, pay over $1mm and you get a whole new hefty tax for the buyer to pay. Yeah, CA is a lot cheaper.
- Bob Willett, "SacRELender"
- Contributions:194
Norm: Actually I haven't seen what closing costs are in NY, but I've heard they are pretty high. (In fact it's kinda funny: when I tell people that CA is considered a low closing costs state they don't believe me; maybe you could get me a NYC estimated net sheet so I could show my clients just how lucky they are.) That's why I qualified my statement saying that they would cover closing costs in my market, but that rate on a regular FHA 4-plex loan would still cover a lot of fees. On a full 203(k) for a 4-plex it wouldn't cover as much.
Nicholas: Are you sure? I've never referred a loan to PA, but I have to Delaware, and they have the same FHA loan programs that every other state I've referred people to has. (That would be probably 15 other states.) Why would PA not allow an owner-occupied 4-plex under an FHA loan; FHA is a national loan program.
- Nicholas Ribeiro, "NicholasRibeiro"
- Contributions:1807
That rate sounds really good! Especially for a 4 unit. In my market that is considered commercial property.. and you think 4 and a quarter is bad!!!
- Norm D Plume, "America Needs Nixon!"
- Contributions:1670
As for the rate, that would be a good rate only if the lender is paying most or all of your closing costs.
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uh huh, have you ever seen the closing costs in Brooklyn, NY? In CA you have the seller paying transfer tax and owner's title policy which doesn't leave much else for the buyer to pay. In Brooklyn about the only thing the seller pays is the deed transfer tax; buyer is paying the mortgage tax, the lender is paying a mortgage tax (and how is that fee passed along?), attorney fees, recording fees that are 5+ times those of CA, the entire title policy, and some hefty property taxes.
I'm guessing that the 4.25% rate is because you need to pay PMI (private mortgage insurance) with an FHA loan.
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bad guess; FHA loans don't have PMI. They do have MMI and UFMIP.
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uh huh, have you ever seen the closing costs in Brooklyn, NY? In CA you have the seller paying transfer tax and owner's title policy which doesn't leave much else for the buyer to pay. In Brooklyn about the only thing the seller pays is the deed transfer tax; buyer is paying the mortgage tax, the lender is paying a mortgage tax (and how is that fee passed along?), attorney fees, recording fees that are 5+ times those of CA, the entire title policy, and some hefty property taxes.
I'm guessing that the 4.25% rate is because you need to pay PMI (private mortgage insurance) with an FHA loan.
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bad guess; FHA loans don't have PMI. They do have MMI and UFMIP.
- Nick Novak, "Nick Novak"
- Contributions:1
Hi dcyn720:
Congratulations on having such an outstanding credit score. You are certainly in an envious position and a postiion of leverage.
There is no reason for you to settle for any rate that is more than the rock bottom 30 year fixed rate mortgage. You have worked for and deserve to get the best that is out there. With that, I believe that you should let your lender know that you intend to shop around for an interest rate that corresponds to your credit score. Please keep in mind that there are other factors in shopping for your mortgage like closing costs, origination fees, etc, etc. As a good consumer, you will give yourself the best chance to get the best mortgage deal. Thanks, Nick Novak, Remax Realty
[E-mail deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
Congratulations on having such an outstanding credit score. You are certainly in an envious position and a postiion of leverage.
There is no reason for you to settle for any rate that is more than the rock bottom 30 year fixed rate mortgage. You have worked for and deserve to get the best that is out there. With that, I believe that you should let your lender know that you intend to shop around for an interest rate that corresponds to your credit score. Please keep in mind that there are other factors in shopping for your mortgage like closing costs, origination fees, etc, etc. As a good consumer, you will give yourself the best chance to get the best mortgage deal. Thanks, Nick Novak, Remax Realty
[E-mail deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
- Bob Willett, "SacRELender"
- Contributions:194
The FHA is because you only have 5% to put down. You can get 5% or less down on a conventional, but only on a single family property. Four-units would require 20% down.
As for the rate, that would be a good rate only if the lender is paying most or all of your closing costs. (I don't know what closing costs are in that area; here we could cover them easily at that rate.)
The rate on a 203(k) loan would be higher, but not that much higher. It would really depend on where they are delivering them. Fees are higher in any case because there is more work on a 203(k.)
As for the rate, that would be a good rate only if the lender is paying most or all of your closing costs. (I don't know what closing costs are in that area; here we could cover them easily at that rate.)
The rate on a 203(k) loan would be higher, but not that much higher. It would really depend on where they are delivering them. Fees are higher in any case because there is more work on a 203(k.)
- KKSka14
- Contributions:63
I actually don't see anything wrong with the rate. At $68k in income with a $400,000 mortgage you will be on the higher end of DTI; your loan amount is over $417,000, which is the magic number in pricing; and you're being priced out on a multi-family unit.
- Wes Black
- Contributions:509
I believe that you can get a better rate on a conventional loan with 20%. It is going to be a personal decision as to how much money you want to part with and when. Congratulations on your financial accomplishments!
- John Paunan, "John Paunan"
- Contributions:1145
dcyn720,
I would say that you would not get a better deal with a conventional loan, because MI is harder to come by for multi-units on conventional loans (not even available in the Chicago area) and there is a rate adjuster put on multi-units that aren't applied to FHA loans. I would definitely look around some more because you should be able to get around 3.75% for an FHA loan, unless there is something strange happening in Brooklyn.
Around here, 3.75% is still coming with a big rebate from the lender, so I can't imagine that the rate would be that much worse where you are...
Good luck!
I would say that you would not get a better deal with a conventional loan, because MI is harder to come by for multi-units on conventional loans (not even available in the Chicago area) and there is a rate adjuster put on multi-units that aren't applied to FHA loans. I would definitely look around some more because you should be able to get around 3.75% for an FHA loan, unless there is something strange happening in Brooklyn.
Around here, 3.75% is still coming with a big rebate from the lender, so I can't imagine that the rate would be that much worse where you are...
Good luck!
- Mitchell Feldman, "Full Time Broker"
- Contributions:775
Dear dcyn720:
Interest rates vary from bank to bank, you have to shop around and see what the best deal its that you are qualified for. 4.25% on a 30 year fixed with 5% down it pretty much the going rate right now here in Brooklyn. In the end the rate you receive will be based on your qualifications which include income, debt, credit report and down payment amount. Usually the 203K will not be higher, but even if it is it would be nominal.
Your best bet is to speak to several mortgage bankers and ask these questions. If I can be of further assistance, please let me know. Good luck!
Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Interest rates vary from bank to bank, you have to shop around and see what the best deal its that you are qualified for. 4.25% on a 30 year fixed with 5% down it pretty much the going rate right now here in Brooklyn. In the end the rate you receive will be based on your qualifications which include income, debt, credit report and down payment amount. Usually the 203K will not be higher, but even if it is it would be nominal.
Your best bet is to speak to several mortgage bankers and ask these questions. If I can be of further assistance, please let me know. Good luck!
Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
- Mike Akerly, Esq., "Akerly Real Estate"
- Contributions:13
I'm guessing that the 4.25% rate is because you need to pay PMI (private mortgage insurance) with an FHA loan. You should be able to get a better rate with a conforming loan, but you'll need to have 20% down.
HELP!! I have 800 credit, no debt, 5%down..why am I being offered 4.25% FHA ?
I'm confused. I have 800 credit . I have no debt have no, no debt( I pay my bills on time and mostly use cash). I can put 5% down on a property ( ranging from $400k to $475k). In addition I have saved up 8 months worth or cash reserves. I have been ewith my employer for 5 years ( emplyed by the state of NY), making a base pay of around $68k per year. I trying to purchase a multi-family property ( 4 units) which will be owner occupied) and is self sustaining. So why am I being offered 4.25% for FHA loan..shouldn't I be able to get a better rate? Is it possible I would be better off going with a conventional loan? And is the intertest rate of a 203k FHA loan higher than a regular FHA loan? Some lenders( mortgage bankers and internet lenders) I have spoken with same its the same some say 203k rate is higher. I'm getting really confused now. Please can someone set me straight with answers, please. Thank you.
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