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I have avg. credit score 800, husband avg. 660, do we have to pay points on Mortgage?

Together we have good income, not much debt and are ready to purchase. We also have 20% down payment. We recently got a GFE from a mortgage company for a 260k loan and they are quoting us almost 7k in closing costs plus $5,200 in points. I'm thinking this is crazy. My husbands credit was affected by a divorce in 2007 and hasn't had anything against it since but hasn't borrowed much. We also belong to 2 credit unions. Is it worth applying for a home loan with them? Will we get more hits on our credit everytime we apply? Will we have to pay points??
  • June 26 2013 - US
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Answers (8)

Profile picture for user40607056
I tried to give you all thumbs up for your helpfulness but only got one thumbs up?! I really appreciate your advice and will continue to shop around. I've always been pretty fortunate to receive loans pretty easy so this has been a tough one for me. I do understand that this is only temporary for us because we do have a smart plan in place for our future:) Thanks again!
  • June 26 2013
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Profile picture for 800lbs In The Room

Keep looking. There are better rates/points for your situation out there.

Barb,

If you have a borrower that comes to you to do a cash-out refi on their 3 unit investment property waiving escrows with a 660 score for 50K, are you able to give them a situation that they will not have to pay points? From what I have seen, most lenders will have a ceiling rate and with 3.5 in hits, they would surpass the ceiling. Am I wrong on this thought?

  • June 26 2013
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If you are buying a single family home with the scenario you provided, you should have much less in points attached to that rate. I would definately look to see what else is out there. Let me know if I can help. All the best!
  • June 26 2013
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Profile picture for Brad Secundy
Yes..Yes YEs..Apply away..It's always a good idea to get a Good Faith Estimate from atleast three lenders..Than compare them side by side. Most lenders will give you a Good Faith Estimate with the information on your credit score that you supply them. Keep Shopping its your savings..That you can use to go to Hawaii..
  • June 26 2013
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No one has to pay points.You should ask for a quote with and without points and compare the two.
  • June 26 2013
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Probably should be one or the other.  Either the 2 points and a lower rate or 5% without the points depending on how long you need the lock for.  May want to shop around a little bit.  The other option to consider is just applying in your name so that his credit score does not drag you down.  
  • June 26 2013
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Profile picture for daveskow

ask who you are  working with to  provide a  rate quote with no points ...they should be able to do this  ( rate will be higher though)


Doesnt hurt to get another quote with same variables  in place with another lender ( tell them your scores versus  having them pull a new report)

  • June 26 2013
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Profile picture for user40607056
Additional info....The rate quoted was 5% for a 30 yr. fixed....
  • June 26 2013
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