FNMA requires an additional 1.75% of loan amount for NON owner @ 75% at origination. (Not in rate)
(At 80% it is 3.00% !!!)
Assuming that you will keep the loan for a couple of years, you are better off paying cash to pay this rather than take a higher rate for 30 years.
The higher the rate goes the less it makes sense to do a no cost loan
Several years ago, subprime buydowns were all the same, pay 1 pt, save .50. Break even in 2 years.
No more…
Today, buydowns are completely willy nilly.
Buydowns aren’t usually that good for high credit, owner occupied, unless you have a low credit score. Then the buydowns are the exact same as non owner.
The lender that I may have with the best base rate has crappy buydowns…..
The lender with a crappy base rate has better buydowns…
There is no set buydown cost. Each 1/8th that I look at has a different cost.
Actual buydown costs right now: For each eighth..
5.375 to 5.25 cost .46
5.25 to 5.125 cost .14
5.125 to 5.00 cost .09
5.00 to 4.875 cost .38
4.875 to 4.75 cost .60
If you can figure it out, please explain it to me.
Another puzzle: One good lender raised rates from this morning and another lender dropped their rates.
Several lenders consistently have better rates. Anybody who goes to the others are typically paying .25% higher in rate for the life of the loan, they just don’t know it.
(Like when people use their friends for free loans that are actually costing them a small fortune)
I’m really anal about rates so I can offer ppl the lowest that I have access to. I’m constantly checking them online, they really can change at anytime. I usually try to lock ppl while I have them on the phone if they like the rate.
