Risk of Floating...

Hmmmm, I find this interesting as the FHA rate I received today is listed below. 

Rich,

We're at 5% for .875 pts on 30 day, or 1.25 on the 60 day.

Next week we will be at 30 days.

There were no origination or discount points for the 5.5% rate.  5% was 1 origination and .75 discount.

Thanks Chris, for some reason, I am still questioning my GFE. 

-Rich

Rich, my FHA rates are for NJ.  I don't know where you're borrowing, but prices differ in each state/region.  The rates and prices you were offered seem legit.

Right and I am in Ohio, so I understand they will be different.  I just don't like not knowing what it all means and thus the reason for questioning the GFE.. :)

Well, you're in the right place for any questions.  A lot of mortgage professionals, borrowers, lenders, etc. are here to bounce things off of or answer any questions you might have.  This site has really helped me understand what all these mortgage numbers and other nonsense means.

Rich, What questions do you have about your GFE?

I am just questioning the fees and what not.  I don't know what the "normal" fees would be, so since I don't know, I feel like I may not be getting the best deal.  I have to put my faith in the Lender and I like doing my research.  Without knowing what the fees should be, it makes me uneasy about trusting the amounts are in check with the norm.  Does that make sense?

Chris Bradley:

Well, you're in the right place for any questions.  A lot of mortgage professionals, borrowers, lenders, etc. are here to bounce things off of or answer any questions you might have.  This site has really helped me understand what all these mortgage numbers and other nonsense means.

And with that in mind, I really would like to say a huge thank you to all of the professionals who have been chiming in to answer questions.

After black Wed I went googling to try to find a site to help educate me about the world of mortgages. This site has been great and really would like to thank the site staff and contributors.

I am floating with a June 22 close and simply hoping for the best. I think my loan processor is almost part therapist with a lot of her floating clients right now.

Once again, thanks for the information!

Leslie

Rich - are you working with a buyer's agent?  If so, they should have an idea what your fees should be around.  If not, you should get one.  It's no cost to you...their commission is paid by the seller and it's kind of a free insurance policy for you to make sure you don't get ripped off too much.  Typical closing costs should be around 2-3% of your loan amount.  Again, it depends on location, loan type, etc.  If any fee looks unusual, you should definitely ask questions or run it by this message board...can't hurt to ask.  The rates/prices depend on the lender and the market.  They usually will offer you a rate for no cost, and another for 1pt. or 1.5pts, for example.  It's usually a good idea to run that through this website too, since many fine people in the industry give good advice here and can tell you if those rates are competitive.   

it does make sense - getting a mortgage in many ways is a life altering event - especially given the current credit climate. If you feel like you are not gettig a good deal talk to your lender and address your concerns. did you shop around before taking application with your current lender?

Chris (CB3), I am in NJ (Bergen County) as well doing the same 30Y FHA.  I got 5.5% without any origination.  The Mortgage Consultant told me that it would be 1.2 points to lower the rate to 5.25% and no origination.

Seemed like a fair deal to me...They are no longer offering the floating point option however I am thinking of submitting all the paperwork and then locking down when the rates are a bit lower. 

Any recommendations by mortgage experts here?

Kumar 5.25 for a NJ FHA with 0 orig. and discount is "doable" today.

Kumar - 1.2pts to lower the rate .25% is a tough call.  It depends on your loan amount and the amount of time you expect to stay in that home.  You have to figure out if the money you'll save over that time period is worth the amount you will spend up front to pay those points. 

CB, I agree. I actually wasn't planning on buying down. 

I did talk to Gary who offered me even better rate.  Now, i am starting to feel a little better in my decision of purchasing a house.

Gary,

I did shop around a little bit, but here's the thing.  To get the builder incentives, I have to use their mortgage company.  I just want to make sure I am not getting a bad deal.

-Rich

Rich, I'm in the same boat as you.  Builder has their own mortage company and title company.  You stay with them, they give a huge incentive package.  The closing costs so far have been right in line with everything else as far as I have seen so far.  I have had no problems at all with their mortage company, they are great and are equal or better to other rates I have seen so far.

Kumar -Glad you are happy with your decision to purchase a house.  No matter how stressful all this nonsense is, it's still something to be excited about.  This is YOUR house.  It will look the way YOU want, have the furniture YOU want, the colors YOU want, etc.  It's still an investment as well.  Home prices will eventually (hopefully sooner rather than later) begin to appreciate again and you will have equity.  Also remember, even though rates are "high" compared to April & May, a lot of people are still jealous of the rates we're getting as well as the prices we are paying for our home.  I have to keep reminding myself of that everytime I get angry that rates jumped to 5.5% the day before I could lock.  Good luck to you!

Rich & Aaron - I'm with you guys.  I'm "locked-in" to the builder's mortgage company because of incentives.  Free finished basement (13,000) and 12' add-on (25,000) for using their mortgage company.  Hard to turn that down.  Their closing costs are a little higher than my mortgage company, but nothing major.  The rates are fair, but I can't really "negotiate" for them to pay 1/2 point, or buy me .25% or anything like that because I can't threaten to finance elsewhere.  Being in the mortgage business and talking to people, i've heard that these "builder's mortgage company" deals will usually try to be good to you because they obviously want you to recommend them or assure others that it's ok to go with their lender...so they won't go out of their way to try to screw you.  Good luck with your new construction!

Odds are that the originator that works for the builder will add on some extra fees, but they will not come anywhere near what the incentives are for you to use them.  The originator knows that they have a captured buyer and will profit from the advantage.  You will get a competative program, it will just be a little on the high side of competative.

You can choose to focus on the additional cost that the originator adds on or on the incentives you are getting.  Ultimately, you get a far better deal by going with the builder's mortgage company.

Rates still the same today...although worried when looking at the MBS prices...