[HLS]

FNMA has a funky matrix table to determine loan pricing. The best rate possible is for a loan below 60% of the value and a mid credit score above 700.

The rate is the same for a 25% LTV loan with a 800 score.
If you score is 620-699 the same loan will cost .25% more at origination,(not in rate)

At 80% of the value, you need a 740+ score for the best rate. A 739 score will cost .25% more.

There are various combinations in between, based on credit score and LTV.
These are FNMA guidelines that everyone has in pricing a loan.

On a $400K loan @ 80%, a borrower with a 639 score would have to pay $11,000 up front to get the same rate as a borrower with a 740 score gets at no extra cost. Another option is to take a rate about 2 points higher instead.

What nobody understands is how buydowns are priced.
There is no set formula. 5 different lenders can all have different buydown costs at different rates.

Different wholesale lenders have different rates as well, some are consistently higher.

A lender who has the best par rate is not the same lender that offers the best buydown rates.

Not every broker has access to every lender.
The best lenders dont want to deal with shady brokers. These brokers end up only having access to lenders with higher rates. When they tell you it’s the best rate that they have, it usually isn’t the best rate available.

In the last 2 days, I had 30YR fixed with a small buydown at 4.875% and 5.00% was available with a .50% cost yesterday, but only for about an hour.

In the last 2 days, rates were the lowest that they have ever been in history. Rates moved up to 5.25% by the end of the day. They really do move that fast. HLS

[HLS]

FNMA has a funky matrix table to determine loan pricing. The best rate possible is for a loan below 60% of the value and a mid credit score above 700.

The rate is the same for a 25% LTV loan with a 800 score.
If you score is 620-699 the same loan will cost .25% more at origination,(not in rate)

At 80% of the value, you need a 740+ score for the best rate. A 739 score will cost .25% more.

There are various combinations in between, based on credit score and LTV.
These are FNMA guidelines that everyone has in pricing a loan.

On a $400K loan @ 80%, a borrower with a 639 score would have to pay $11,000 up front to get the same rate as a borrower with a 740 score gets at no extra cost. Another option is to take a rate about 2 points higher instead.

What nobody understands is how buydowns are priced.
There is no set formula. 5 different lenders can all have different buydown costs at different rates.

Different wholesale lenders have different rates as well, some are consistently higher.

A lender who has the best par rate is not the same lender that offers the best buydown rates.

Not every broker has access to every lender.
The best lenders dont want to deal with shady brokers. These brokers end up only having access to lenders with higher rates. When they tell you it’s the best rate that they have, it usually isn’t the best rate available.

In the last 2 days, I had 30YR fixed with a small buydown at 4.875% and 5.00% was available with a .50% cost yesterday, but only for about an hour.

In the last 2 days, rates were the lowest that they have ever been in history. Rates moved up to 5.25% by the end of the day. They really do move that fast. HLS

[HLS]

Have no idea what you actually qualify for, but with a credit score above 740 and a loan amount below 60% LTV,

30 YR rates are 4.99% with .75% cost right now. Between 60%-80% LTV cost is 1pt.

Maybe they will go lower. HLS

[HLS]

Have no idea what you actually qualify for, but with a credit score above 740 and a loan amount below 60% LTV,

30 YR rates are 4.99% with .75% cost right now. Between 60%-80% LTV cost is 1pt.

Maybe they will go lower. HLS

[HLS]

Have no idea what you actually qualify for, but with a credit score above 740 and a loan amount below 60% LTV,

30 YR rates are 4.99% with .75% cost right now. Between 60%-80% LTV cost is 1pt.

Maybe they will go lower. HLS

[HLS]

Have no idea what you actually qualify for, but with a credit score above 740 and a loan amount below 60% LTV,

30 YR rates are 4.99% with .75% cost right now. Between 60%-80% LTV cost is 1pt.

Maybe they will go lower. HLS

[HLS]

Have no idea what you actually qualify for, but with a credit score above 740 and a loan amount below 60% LTV,

30 YR rates are 4.99% with .75% cost right now. Between 60%-80% LTV cost is 1pt.

Maybe they will go lower. HLS

[HLS]

IF the 4.50% rate actually happens, the restrictions and fees may be obscene, and not everyone will qualify.

I doubt it’s going to be a no cost loan.
For those that qualify, the rate is 4.99% RIGHT NOW.

If you don’t qualify, the rate doesn’t matter.

The govt doesn’t care about Southern California, they are trying to save the country.

Plenty of people in trouble have mortgages for less than $200K.

On a $200K loan the difference between 4.5% and 5% is $60 a month. On $300K it’s $90 a month.
Is this going to save the world ??

People with $100K loans are losing houses too.

It may not apply to refi’s, just purchases.

Eventually rates will go much, much higher.

Today’s rates are a gift, but ppl want to think that they will qualify if rates go lower. HLS

[HLS]

IF the 4.50% rate actually happens, the restrictions and fees may be obscene, and not everyone will qualify.

I doubt it’s going to be a no cost loan.
For those that qualify, the rate is 4.99% RIGHT NOW.

If you don’t qualify, the rate doesn’t matter.

The govt doesn’t care about Southern California, they are trying to save the country.

Plenty of people in trouble have mortgages for less than $200K.

On a $200K loan the difference between 4.5% and 5% is $60 a month. On $300K it’s $90 a month.
Is this going to save the world ??

People with $100K loans are losing houses too.

It may not apply to refi’s, just purchases.

Eventually rates will go much, much higher.

Today’s rates are a gift, but ppl want to think that they will qualify if rates go lower. HLS

[HLS]

IF the 4.50% rate actually happens, the restrictions and fees may be obscene, and not everyone will qualify.

I doubt it’s going to be a no cost loan.
For those that qualify, the rate is 4.99% RIGHT NOW.

If you don’t qualify, the rate doesn’t matter.

The govt doesn’t care about Southern California, they are trying to save the country.

Plenty of people in trouble have mortgages for less than $200K.

On a $200K loan the difference between 4.5% and 5% is $60 a month. On $300K it’s $90 a month.
Is this going to save the world ??

People with $100K loans are losing houses too.

It may not apply to refi’s, just purchases.

Eventually rates will go much, much higher.

Today’s rates are a gift, but ppl want to think that they will qualify if rates go lower. HLS

[HLS]

IF the 4.50% rate actually happens, the restrictions and fees may be obscene, and not everyone will qualify.

I doubt it’s going to be a no cost loan.
For those that qualify, the rate is 4.99% RIGHT NOW.

If you don’t qualify, the rate doesn’t matter.

The govt doesn’t care about Southern California, they are trying to save the country.

Plenty of people in trouble have mortgages for less than $200K.

On a $200K loan the difference between 4.5% and 5% is $60 a month. On $300K it’s $90 a month.
Is this going to save the world ??

People with $100K loans are losing houses too.

It may not apply to refi’s, just purchases.

Eventually rates will go much, much higher.

Today’s rates are a gift, but ppl want to think that they will qualify if rates go lower. HLS

[HLS]

IF the 4.50% rate actually happens, the restrictions and fees may be obscene, and not everyone will qualify.

I doubt it’s going to be a no cost loan.
For those that qualify, the rate is 4.99% RIGHT NOW.

If you don’t qualify, the rate doesn’t matter.

The govt doesn’t care about Southern California, they are trying to save the country.

Plenty of people in trouble have mortgages for less than $200K.

On a $200K loan the difference between 4.5% and 5% is $60 a month. On $300K it’s $90 a month.
Is this going to save the world ??

People with $100K loans are losing houses too.

It may not apply to refi’s, just purchases.

Eventually rates will go much, much higher.

Today’s rates are a gift, but ppl want to think that they will qualify if rates go lower. HLS

[HLS]

You NEVER get the best rate when you get a no cost loan.
It is a very misleading concept.

There are no fee loans, there are no cost loans.
They are not the same thing. With either of these you are getting a higher rate, which equates to a higher rate and a higher payment for 30 years.

There are retail rates and there are wholesale
rates. Most people pay retail.

I explain this to anyone who wants to listen and give them the choice of the best rates that they might actually qualify for, rather than general rates in the media.

99% of people looking for a loan have no idea where they fall in the matrix of qualifying by FNMA guidelines.
1 point difference in credit score can cost thousands of dollars over the life of a loan.
There may be ways to raise scores quickly, but they aren’t told that because their “friend” doing their loan doesn’t know it either.

There is also the option of getting the lowest (wholesale) rate possible, and paying for the costs, which results in the lowest rate and lowest payment possible for the life of the loan.
It generally takes 3-4 years to come out ahead, then you are saving for the balance of 30 years.

Many people want to assume that they will just get a free loan and refi if rates drop.
They are now stuck in a higher rate loan or an ARM that is going to explode, AND UNABLE TO REFI.

Never before in history have such a large % of “homeowners” been unable to refinance.
They no longer qualify for a loan, at ANY rate.

With rates now just above historical lows, I think it is extremely foolish to want a no cost or no fee loan, gambling that rates will go lower.
They don’t know if they will qualify.

Banks will tell you that they have no fees. It’s a lie. The fact is that the rate that they quote you (retail)is higher to compensate for fees. It’s simply a retail rate.

In general, you have clueless consumers (who think they understand loans) going to clueless salespeople (who think they understand finances & loans) for the largest financial transaction of their lives. Neither one seem to want to learn what they don’t know.

This is a recipe for disaster resulting in the simple fact that 99% of borrowers did not get the best loan that they could have on the day that they chose to lock.

Higher retail rates may not change as often as wholesale rates which can change at any time.

This morning’s opening rates for 30 YR fixed are well off the lows of several days ago. What was 5.00% is now 5.25 They could end the day higher or lower. Right now, by paying an additional .75%, the rate is 4.875% saving .50% HLS

[HLS]

You NEVER get the best rate when you get a no cost loan.
It is a very misleading concept.

There are no fee loans, there are no cost loans.
They are not the same thing. With either of these you are getting a higher rate, which equates to a higher rate and a higher payment for 30 years.

There are retail rates and there are wholesale
rates. Most people pay retail.

I explain this to anyone who wants to listen and give them the choice of the best rates that they might actually qualify for, rather than general rates in the media.

99% of people looking for a loan have no idea where they fall in the matrix of qualifying by FNMA guidelines.
1 point difference in credit score can cost thousands of dollars over the life of a loan.
There may be ways to raise scores quickly, but they aren’t told that because their “friend” doing their loan doesn’t know it either.

There is also the option of getting the lowest (wholesale) rate possible, and paying for the costs, which results in the lowest rate and lowest payment possible for the life of the loan.
It generally takes 3-4 years to come out ahead, then you are saving for the balance of 30 years.

Many people want to assume that they will just get a free loan and refi if rates drop.
They are now stuck in a higher rate loan or an ARM that is going to explode, AND UNABLE TO REFI.

Never before in history have such a large % of “homeowners” been unable to refinance.
They no longer qualify for a loan, at ANY rate.

With rates now just above historical lows, I think it is extremely foolish to want a no cost or no fee loan, gambling that rates will go lower.
They don’t know if they will qualify.

Banks will tell you that they have no fees. It’s a lie. The fact is that the rate that they quote you (retail)is higher to compensate for fees. It’s simply a retail rate.

In general, you have clueless consumers (who think they understand loans) going to clueless salespeople (who think they understand finances & loans) for the largest financial transaction of their lives. Neither one seem to want to learn what they don’t know.

This is a recipe for disaster resulting in the simple fact that 99% of borrowers did not get the best loan that they could have on the day that they chose to lock.

Higher retail rates may not change as often as wholesale rates which can change at any time.

This morning’s opening rates for 30 YR fixed are well off the lows of several days ago. What was 5.00% is now 5.25 They could end the day higher or lower. Right now, by paying an additional .75%, the rate is 4.875% saving .50% HLS

[HLS]

You NEVER get the best rate when you get a no cost loan.
It is a very misleading concept.

There are no fee loans, there are no cost loans.
They are not the same thing. With either of these you are getting a higher rate, which equates to a higher rate and a higher payment for 30 years.

There are retail rates and there are wholesale
rates. Most people pay retail.

I explain this to anyone who wants to listen and give them the choice of the best rates that they might actually qualify for, rather than general rates in the media.

99% of people looking for a loan have no idea where they fall in the matrix of qualifying by FNMA guidelines.
1 point difference in credit score can cost thousands of dollars over the life of a loan.
There may be ways to raise scores quickly, but they aren’t told that because their “friend” doing their loan doesn’t know it either.

There is also the option of getting the lowest (wholesale) rate possible, and paying for the costs, which results in the lowest rate and lowest payment possible for the life of the loan.
It generally takes 3-4 years to come out ahead, then you are saving for the balance of 30 years.

Many people want to assume that they will just get a free loan and refi if rates drop.
They are now stuck in a higher rate loan or an ARM that is going to explode, AND UNABLE TO REFI.

Never before in history have such a large % of “homeowners” been unable to refinance.
They no longer qualify for a loan, at ANY rate.

With rates now just above historical lows, I think it is extremely foolish to want a no cost or no fee loan, gambling that rates will go lower.
They don’t know if they will qualify.

Banks will tell you that they have no fees. It’s a lie. The fact is that the rate that they quote you (retail)is higher to compensate for fees. It’s simply a retail rate.

In general, you have clueless consumers (who think they understand loans) going to clueless salespeople (who think they understand finances & loans) for the largest financial transaction of their lives. Neither one seem to want to learn what they don’t know.

This is a recipe for disaster resulting in the simple fact that 99% of borrowers did not get the best loan that they could have on the day that they chose to lock.

Higher retail rates may not change as often as wholesale rates which can change at any time.

This morning’s opening rates for 30 YR fixed are well off the lows of several days ago. What was 5.00% is now 5.25 They could end the day higher or lower. Right now, by paying an additional .75%, the rate is 4.875% saving .50% HLS

[Author]

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