30 Year Fixed Rate Loan at a Cost of One Point: 3.99%

30 Year Fixed Rate Loan at a Cost of One Point: 3.99%*
Rates got better yesterday after New Home Sales numbers made a surprisingly poor showing, but today they got slightly worse.

Met Life, however, is buying the market today, and we are able to quote 3.99% at a cost of one point, amazingly. They can still close clean purchases in 30 days too. Refi’s, however, are a whole different story, as they are taking over 20 days just to get under-written at Met Life. Purchases clearly get tremendous priority.

We have a borrower who just backed out of their purchase transaction b/c they are not netting as much as they’d like on the sale of their current residence. They opted to “wait for the market to come back” before selling and then buying another house (they need a larger home for their family). Their current house is worth about $400,000.

If someone is waiting to sell a $1.5 million house so they can move to Des Moines or retire in a Condo, then waiting might make sense.

BUT, waiting to sell in a stronger market to buy in the same stronger market makes no sense. They will not only end up with the same loan amount, but they will also very likely end up with a much higher interest rate.

A $400,000 loan at 3.99% yields a payment of $1,907 (P&I only). A $400,000 loan at 8.0% yields a payment of $2,935.

Our clients mentioned above could very well just end up with a $1,000 per month higher payment.

*The above rate quote has the following assumptions: $400,000 Loan Amount; 20% down payment; credit score above 740; property is SFR; borrower has sufficient income to qualify; APR is approximately 0.20% higher than quoted rate for a $400,000 loan. Estimated closing costs affecting the APR include $4,595 for Origination and Processing Fees, $850 for other Lender Fees; $1,400 for Escrow Fees, and $1,000 for Prepaid Interest.

Call Jay Voorhees or Heejin Kim at (925) 855-4491

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