usctrojancpa
Well-known member
woodburyowner said:
Not sure as my buyer was only looking at a 30-year fixed rate. I'm sure we have to be under 3% on the 7/1 ARM loan.
How low can we go? 30 yr fixed at 3.75% with no fees...
- Thread starter ps99472
- Start date
Not sure as my buyer was only looking at a 30-year fixed rate. I'm sure we have to be under 3% on the 7/1 ARM loan.
irvinebullhousing
Well-known member
irvinehomeowner said:
Gotta to prove your income, no problem with LTV because prices have risen.
.
potsticker
Active member
woodburyowner said:
I completed it. I referred another person to Cashcall this week and they're still offering the same rate for condo. Might be even lower next week...
sgip
Well-known member
Some things to consider as we experience a trough of lower rates....
A) Back during the last week of March, 2019 we saw fixed rates flop from the low 4's to the upper 3's. - for about 5 days, then things popped up. While I believe there is still some room for this present run to continue, don't get greedy. The moment someone blinks on this trade war stuff, sub 4% rates could vanish. The 2020 rate begins in earnest roughly 60 days from now and a falling stock market will probably be "fixed" soon, pushing money into risk and out of rates.
B) ARM rate movements do not correlate to fixed rate movement. Yes, all rates have come down, but while fixed rates can be seen to move sharply during a week, ARM's don't always adjust downward at the same rate of speed as their fixed counterparts.
C) As refi pipelines swell, many banks (which include brokers and bankers BTW) are going to ease their foot off the gas, letting profit margins come up a bit to slow the rush of business. It happens every refi boom since the dawn of time. Expect this turn to come sooner rather than later.
D) The 800 FICO some customers believe they have.... isn't the case. About 110 percent of all customers I've spoken with in the past 30 days with 800 FICO scores turn out to have sub 780 scores. The only way to get an accurate rate - and to have lenders accurately compete for your business - is to have a hard credit report pull from a lender. More info here:
https://www.investopedia.com/articles/personal-finance/103015/are-credit-karma-scores-real-and-accurate.asp
Yes, a 779 FICO vs a 781 FICO might be as much as a .25% difference in rate! It has gotten to the point now that when I get a "what's your rate?" call, the first question I ask is "when did the lender pull your score, who was the lender, and what score did they give you?" If there isn't an answer to those questions, I can only refer folks to our internet rate page as a general idea of where loan terms are. There's no sense quoting terms when 90% of what impacts loan rates is missing.
E) A customer I spoke with on Wednesday got a 2.75% 10/1 ARM, Interest Only from a major bank. Here's how they got that rate:
1) They had $750k with the bank already.
2) They had a real credit report score of 806
3) They had 40% Equity.
4) Their loan was $2.3m
5) The deal was a purchase, not a refi.
Every refi shopper out there has heard this great deal and that great deal is being offered. Bear in mind it's context, context, context, and your refi deal may not be the same as some being quoted around the office, the gym, or the BBQ this weekend.
F) "I got a 3.875% rate when I bought. Now I'm told rates are down, but I can only get 3.875%! Everyone else is at 3.75! What's up with that???"
If you bought in 2016-2018 Conforming Loan Limits were much lower than where they are today. Banks were able to offer their portfolio loans with better terms to anyone with a mortgage amount over $417,000. Today, Conforming Loan Limits in OC are $484,350 so any loan below that threshold will need to refinance with a Conforming Loan, not a Bank Portfolio deal. Conforming loan rates are about .125 to .25% higher today than Bank Portfolio terms.
There's plenty more to discuss (tax consequences when over $750k, recourse v no-recourse, money movement to banks, impounding v non-impounding, etc...) but this thread post is long enough. Ping me with your individual questions if they are of a private nature, or post here and I'll try and answer the scenario as best I can.
My .02c
SGIP
A) Back during the last week of March, 2019 we saw fixed rates flop from the low 4's to the upper 3's. - for about 5 days, then things popped up. While I believe there is still some room for this present run to continue, don't get greedy. The moment someone blinks on this trade war stuff, sub 4% rates could vanish. The 2020 rate begins in earnest roughly 60 days from now and a falling stock market will probably be "fixed" soon, pushing money into risk and out of rates.
B) ARM rate movements do not correlate to fixed rate movement. Yes, all rates have come down, but while fixed rates can be seen to move sharply during a week, ARM's don't always adjust downward at the same rate of speed as their fixed counterparts.
C) As refi pipelines swell, many banks (which include brokers and bankers BTW) are going to ease their foot off the gas, letting profit margins come up a bit to slow the rush of business. It happens every refi boom since the dawn of time. Expect this turn to come sooner rather than later.
D) The 800 FICO some customers believe they have.... isn't the case. About 110 percent of all customers I've spoken with in the past 30 days with 800 FICO scores turn out to have sub 780 scores. The only way to get an accurate rate - and to have lenders accurately compete for your business - is to have a hard credit report pull from a lender. More info here:
https://www.investopedia.com/articles/personal-finance/103015/are-credit-karma-scores-real-and-accurate.asp
Yes, a 779 FICO vs a 781 FICO might be as much as a .25% difference in rate! It has gotten to the point now that when I get a "what's your rate?" call, the first question I ask is "when did the lender pull your score, who was the lender, and what score did they give you?" If there isn't an answer to those questions, I can only refer folks to our internet rate page as a general idea of where loan terms are. There's no sense quoting terms when 90% of what impacts loan rates is missing.
E) A customer I spoke with on Wednesday got a 2.75% 10/1 ARM, Interest Only from a major bank. Here's how they got that rate:
1) They had $750k with the bank already.
2) They had a real credit report score of 806
3) They had 40% Equity.
4) Their loan was $2.3m
5) The deal was a purchase, not a refi.
Every refi shopper out there has heard this great deal and that great deal is being offered. Bear in mind it's context, context, context, and your refi deal may not be the same as some being quoted around the office, the gym, or the BBQ this weekend.
F) "I got a 3.875% rate when I bought. Now I'm told rates are down, but I can only get 3.875%! Everyone else is at 3.75! What's up with that???"
If you bought in 2016-2018 Conforming Loan Limits were much lower than where they are today. Banks were able to offer their portfolio loans with better terms to anyone with a mortgage amount over $417,000. Today, Conforming Loan Limits in OC are $484,350 so any loan below that threshold will need to refinance with a Conforming Loan, not a Bank Portfolio deal. Conforming loan rates are about .125 to .25% higher today than Bank Portfolio terms.
There's plenty more to discuss (tax consequences when over $750k, recourse v no-recourse, money movement to banks, impounding v non-impounding, etc...) but this thread post is long enough. Ping me with your individual questions if they are of a private nature, or post here and I'll try and answer the scenario as best I can.
My .02c
SGIP
usctrojancpa
Well-known member
I was talking to a client yesterday and even he mentioned that the 10-year bond rate is going below 2%. To me, in a back handed way it almost seems like Trump is trying to get the Fed to cut rates since the Fed seems very stock market sensitive.
Soylent Green Is People said:
I am your unicorn.
I've had my credit pulled for loans in '03, '06, '11, '12 and '16, and my score was >800 each time. I last refi'd in 2016. Rates had been coming down, and down, and down. For the rate I got, the lender gave me some money, which was enough to pay for all the costs, plus put a couple grand in my pocket. I could have gotten 1/8 lower, and gotten less from the lender (but enough to pay for all the costs), but I figured I would refi again shortly after and thus have my cake and eat it too. Yes, I got greedy. All good things must come to an end, and the next refi never happened. And now that we're under $484k, it probably never will.
sgip
Well-known member
Sounds like I could have been clearer on this point.
Clients will tell me they have an 800+++ score when they don't. Where do they get the idea they have an 800+++ score? From CreditKarma or Discover or Amex that put out Equifax Vantage Score data - which is useless data when it comes to pricing loans.
As Gordon Gekko said "Greed... is good..." and its OK to be. That said, about 30 customers saw low rates at the end of March, but waited to pull the trigger and the opportunity passed in mere days. Luckily - and that's all it is: by luck - low rates have returned. How long will this last? No one knows, so my advice is to not risk missing this opportunity as many did in March. If we are in a long term bull market for refi rates, another opportunity will come. If not, then it's too bad that door has now closed for some who waited.
My .02c
Clients will tell me they have an 800+++ score when they don't. Where do they get the idea they have an 800+++ score? From CreditKarma or Discover or Amex that put out Equifax Vantage Score data - which is useless data when it comes to pricing loans.
As Gordon Gekko said "Greed... is good..." and its OK to be. That said, about 30 customers saw low rates at the end of March, but waited to pull the trigger and the opportunity passed in mere days. Luckily - and that's all it is: by luck - low rates have returned. How long will this last? No one knows, so my advice is to not risk missing this opportunity as many did in March. If we are in a long term bull market for refi rates, another opportunity will come. If not, then it's too bad that door has now closed for some who waited.
My .02c
woodburyowner
Well-known member
Another option for people who don't want to play the big bank "games" for competitive loans rates is to look at patelco credit union. There is no crazy 779 vs 781 credit score rate change, opaque rate quotes unless you speak with someone, "relationship discount", etc. The rates are just very competitive and you can view it straight from the website.
Irvinehomeseeker
Active member
seems like a great offer. I refinanced in March for 4% and paid around 1500$ out of pocket for high balance conforming loan.
woodburyowner
Well-known member
Soylent Green Is People said:
I do have to say this FICO scoring is VERY confusing for the consumer. BofA offers a free FICO score if you bank with them and it states - "FICO? SCORE
The score lenders use.TM" However, it is giving me a score which is probably 50 points higher than my score I got when I last refinanced. It's just another FAKO score.
woodburyowner
Well-known member
qwerty said:
Hmm. I saw a better rate without the point when I did the comparison last week (website to website). Maybe the market has caught up with them.
usctrojancpa
Well-known member
Lallo said:
You get better rates when you loan is a jumbo portfolio loan versus a confirming loan. Btw, I had a buyer lock in a 3.625% with a credit through a big bank for a 30-year fixed rate on Friday for an Irvine purchase with 25% down (loan is in the high $500s).
Cornflakes
Active member
How is 3.00% @1.02 points on 7/1 ARM Jumbo loan? 20% down.
usctrojancpa
Well-known member
Cornflakes said:
Paying 1.02pts or getting a credit of 1.02pts?
Cornflakes
Active member
USCTrojanCPA said:
Paying a point.
Alternatively, what would be an optimal point to pay for 3%?