current mortgage rates... (upfront, lender, FHA, 1%)
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my broker told me the only reason i would pay 1 point would be to drop the rate down further than 5.25%, and being that i'm wanting this loan with minimal down payment, he says 5.25% with no points is golden.
Thats the rate I got on a FHA 30 fixed, that I closed on in Jan with no points, thats a good rate...
my broker told me the only reason i would pay 1 point would be to drop the rate down further than 5.25%, and being that i'm wanting this loan with minimal down payment, he says 5.25% with no points is golden.
"Golden" sounds like a salesman. Are you paying an origination fee?
Shop it around for sure. At 5.25% today, I would be making 3 points without an origination fee. 4% if you are paying a 1% origination fee. That's high.
If you work a little you will find a better deal like 5.0% with no origination fee and no points.
"Golden" sounds like a salesman. Are you paying an origination fee?
Shop it around for sure. At 5.25% today, I would be making 3 points without an origination fee. 4% if you are paying a 1% origination fee. That's high.
If you work a little you will find a better deal like 5.0% with no origination fee and no points.
i admit, i threw in the "golden"...and NO! i'm not a salesperson...
i guess i don't get what you're saying when you say, "at 5.25%, i would be making 3 points without an origination fee. 4% if you're paying a 1% origination fee."
the deal i'm getting is, 5.25% with NO points. i'm not making any points that i'm aware of, and i'm not 100% sure about an origination fee, so i'll check on that...and this is an FHA loan, where i'm putting the minimum down.
I just checked pricing with one of my lenders and here is what I found.
5.25% on a 30 day lock will pay 3%+ in yield spread premium which means your broker is looking to make 3+ points off you. The yield spread for the 5.5% he originally quoted you would pay about 4 points!
If you were willing to pay 1% origination the par rate would be 4.75% on a 30 day lock for a 30 year fixed FHA.
I don't have an issue with brokers making a living but come on, 3+ points is excessive. In my opinion 1-2 points is very reasonable depending on the loan amount.
Not a terrible deal, but you could probably do better. I would estimate the broker would be making 3% (over $5k) on that deal which is on the high side.
Now since you don't have a property yet, it is all just an estimate at this point. If you were locking in today, you should be able to get the same deal at 5.0% and the lender would make about half as much.
Ask him to send you a GFE showing what the exact yield spread is. If he won't do that don't do business with him. He is SHADY!!
Who cares what the yeild spread is. Find out where you can get the best rate and cost deal. If you get a quote from a bank, which you should do, they don't ever disclose yield spread.
Who cares what the yeild spread is. Find out where you can get the best rate and cost deal. If you get a quote from a bank, which you should do, they don't ever disclose yield spread.
The guy SHOULD care because he will know how much the broker is making off of him. If the broker discloses that he is making 3 YSP then OP is not getting offered the best rate. If OP wants the best rate he should just deal directly with the bank.
Rate really doesn't mean anything to me. A broker could quote someone a 4.75 rate and still make 2 YSP on you depending what par is. It all comes down to what par is for that particular lender.
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sounds like a salesman. Are you paying an origination fee?
