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is this a bad rate?

5.75% on a $430,000 FHA loan - NYC

LO said the rates hit near 6% today. But he's also charging 1% origination fee.
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July 23 2009 - US
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Replies (27)

You should not have to pay more than 5.5% with no more than 1% origination fee.  Rates did move higher yesterday but no where near what your broker is offering
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July 24 2009
More information-NYC-Is it a coop or high rise condo?
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July 24 2009
Mike...Why does that matter for a FHA loan
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July 24 2009
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It's just a 1 family house.

Ugh, I'm feeling a little bit screwed right about now.
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July 24 2009
Depending on how long you need the rate locked you should be looking at 5.5% with no more than 1/2% origination fee
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July 24 2009
I don't know in NYC commands higher rates but even looking at today's rates, after the spike yesterday, 5.50 with no points is an acceptable rate.  That rate is assuming everything else is in line: credit scores, DTI and LTV.
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July 24 2009
NY has a 0.25% mortgage tax payable by the lender. That's why you'll see NY pricing as 0.25 discount points higher than elsewhere.
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July 24 2009
I would have to agree with the other posters.  5.5% with 1 point is kind of high at that loan amount.
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July 24 2009
No,that's not a bad rate at all.Happy Lending!
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July 24 2009
Even with the lending eating the .250 hit for NY, the rate of 5.50 with zero points is still profitable to the lender, especially if it is a purchase and a credit score of 720 or higher.

Post a loan request on Zillow and you will get a better quote than what your current lender is offering.
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July 24 2009
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I thought with FHA the credit score didn't matter. But we're in the 680s.
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July 24 2009
Some FHA Lenders are giving pricing incentives ( more ysp to the lender) with scores over 720 for FHA purchases and refinances.
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July 24 2009
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Some lenders have placed pricing adjustments on goverment loans with negative pricing adjustments on scores between 620-659 and positive adjustments between 720-739 and then an ever better adjustment for scores over 740.
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July 24 2009
That 680 score should not make a difference.  The adjustment for the higher credit score is minimal.
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July 24 2009
seconded:   even with the NY hit; Jumbo FHA 30 fixed; 5.5% on 30 day lock would be 0 points (no origination)
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July 24 2009
In California, FHA interest rates for 30 yr. fixed mortgages are in the low 5% range. If you have good credit (640+) you will find the best interest rates available. However NY state might be different.
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July 24 2009
you should qualify for around 4.87 on a 30 yr fixed fha if your scores above 620  and you qualify
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July 24 2009
True Joe-But we don't do any coops here in LA-Did not know if that was an issue.
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July 24 2009
Stephanie....Where on Earth are you getting 4.875 with 0 points on a Jumbo FHA loan?
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July 24 2009
Stephanie, how can you say 5.75% with 1 point for an FHA loan  "not a bad rate at all" and then 3 hours later you're quoting 4.87 (???) with no points on a jumbo?!?! 

I must have missed that price change today.
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July 24 2009
Good Catch Sean.. She must have confused herself in between putting signs in the ground
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July 24 2009
The definition of this rate being good or bad depends on when you decide to move forward with the transaction... Pricing changes all the time. Sometimes several times in a day. The origination point should reflect "how easy or how hard" it is to get your loan done.  Each transaction is different... 
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July 25 2009
Seems high with paying the orgination fee.
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July 26 2009
Profile picture for adelaidez
update:

the day i posted this rates had gone up and i locked in at 5.75 since we were worried they would go higher. however the broker did agree to remove the origination fee.

i guess i could have done better, but it's not as bad as i originally posted. our loan is approved and we should be clear to close in a day or two and we didn't want to start the whole loan process all over again.
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July 28 2009
If your loan is approved you may be entitled to a float down you should ask your lender if you can float down.  Often times you won't be able to float all the way down to current market rate but lenders typically have policies to allow for clients to realize a rate that is closer to current market.  Particulaly since you locked at 5.75%. Although your original post makes no mention of fico score, If your credit is indeed good I would lobby the broker/lender for a better deal or move on.

Interest rates 6 days ago were no where near 6% and certainly not with a one point origination fee.

5.25%-5.5% with 0 points and NO junk fees is a more respectable offering if you have even 1/2 decent fico scores.

It doesn't seem fair that the practice of absolutely gouging people in this industry is still in existence. 

If he has even 1/2 decent banks at his disposal he's making 2-2.5% on the back of your loan for "giving" you 5.75% and another 1 point on the front. 

3 points on a 430k loan is a truck load of money-  in this free market society you should consider excersing your options and choose the best deal for you can get your hands on.

Good luck
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July 31 2009
edit... just realized this is a jumbo at 430k.  I had FHA standard rates and fees in mind.  In any case 5.75% with 1 point origination is probably still excessive.  Current market should be offering at least 1 point ysp in exchange for that rate.  If the lender's making 2 points on a 430k loan I deem that a bit excessive and question whether your best interests are at the forefront of the proposal.

thanks,
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July 31 2009
Dont listen to Stephanie...seriously

5.5% no points all day...Darlin said it best...go back to your lender and tell him about what your learned here today...then poke him with a fork and say how do you like that, huh?...sorry sometimes I drift off and start typing about stuff I would do to loan officers who still price gouge...at 5.75% today the rebate is about 2.78% and 5.25% is about 1.25%...this is the commission recieved on the back end...he should do a 5.25% no points really and no junk fees...really...yes this is on Agency Jumbo FHA...tell him your going to walk unless he delivers and then make him show you the rate sheet. nyuh nyuh nyuh (evil vampire laugh)


Just saw your other post, if its approved and he took off the point and you are happy and you just want to move in and call it a day and...Run on sentence...if you and your wife are happy go for it. Congrads!!
Hope this helps

Good Luck!!!

 
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July 31 2009
 
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