Home Mortgage advice?

[LAJennifer]

Hubby and I are looking to buy a 4 unit apartment building in another state (WV). We are calling around getting quotes for interest rates. They seem high to me, so what am I missing? With excellent credit and 20% down, we are being quoted 7.75% for 1 point and 6.25% for 3 points. Am I calling the wrong banks? Any help is appreciated.

 

[neatfreak]

I would guess that the current mortgage crisis has something to do with it...

 

[LAJennifer]

Date: 11/5/2008 6:31:38 PM
Author: neatfreak
I would guess that the current mortgage crisis has something to do with it...

Well, yes, I figured that. However, if I look up today's National average APR for a 30 year fixed - it is 6.01%.

 

[NovemberBride]

Three things that might cause your interest rate to differ:

1. If you aren''t going to live in the property (i.e., it won''t be considered your "primary residence") - banks consider loans for second homes or investment properties riskier on the premise that its easier to walk away (stop paying) from somewhere you don''t have to sleep at night.

2. You are looking for a jumbo loan. The averages you refer to are for conforming loans (below a certain amount, I''m not sure what it is today, probably right around 400k). Jumbo loans have higher interest rates than conforming loans (i.e. those below the threshold).

3. Because its a 4 apt property, you may be getting quotes for a commercial mortgage loan vs. a residential motrgage loans. Totally different ball game.

I am not sure if any/all of these apply, but any of these could cause you to be quoted a higher rate than the national average for a plain vanilla mortgage on a single family home that will be your promary resident.

Hope this helps!

 

[LAJennifer]

Date: 11/5/2008 6:55:56 PM
Author: NovemberBride
Three things that might cause your interest rate to differ:

1. If you aren''t going to live in the property (i.e., it won''t be considered your ''primary residence'') - banks consider loans for second homes or investment properties riskier on the premise that its easier to walk away (stop paying) from somewhere you don''t have to sleep at night.

2. You are looking for a jumbo loan. The averages you refer to are for conforming loans (below a certain amount, I''m not sure what it is today, probably right around 400k). Jumbo loans have higher interest rates than conforming loans (i.e. those below the threshold).

3. Because its a 4 apt property, you may be getting quotes for a commercial mortgage loan vs. a residential motrgage loans. Totally different ball game.

I am not sure if any/all of these apply, but any of these could cause you to be quoted a higher rate than the national average for a plain vanilla mortgage on a single family home that will be your promary resident.

Hope this helps!

Thanks for the info - that helped a lot. About the jumbo loan - I''m not sure that applies because the asking price for the property is only $220K. Commercial vs Residential definitely makes sense. Thanks!

 

[sweetjettagirl04]

I work for a mortgage company and our current rate (as of this morning) was 6.25%. That being said it''s been a yo-yo for the past few weeks, ranging from 6 - 8%. Mostly it''s been around 7-something, but it changes daily...

 

[April20]

I dont know that i have anything truly new to add, but I locked in my rate for the home we are purchasing at 6% today. We were quoted 6.5% about five days ago and 5.875% about ten days ago. It''s been quite volitale the last few weeks. My mortgage broker felt that the rates would hold for tomorrow and may or may not drop that additional 1/8%. He indicated that the trend has been to drop to that just below 6% rate and then spike back up near 7.

 

[LAJennifer]

Is having a mortgage broker better than going to a bank directly?

 

[diane5006]

Hi...I suspect that it is because it is a rental property...not owner occupied...the lender may feel that the risk of the propery having problems eg losing value is higher

Also mortage rates differ from state to state...when we moved (july) the mortgage rate in our new state was about 0.5-1% higher that we could have gotten were we were

I am not sure who you checked with...but try Wells Fargo... they have a website...

Good luck


GOOOOOO Mountaineers !!!

 

[diane5006]

As for the broker v bank...I don''t think you can get a better rate from a bank...unless you have a really good relationship...read $$$$$$ with them...

Chase advertises better rates...but I am suspicious...

You should contact 2-3 lenders and see...I may be wrong about this...but looking at too many tweaks you credit score...too many inquies

 

[movie zombie]

in the past i''ve gotten a better rate by doing my own leg work and making a lot of phone calls.

a mortgage broker is offering you products...and s/he only carries so many of them. each broker has a different portfolio of loans/products to sell to you.

you will pay a fee to the broker: nothing is for free. you may pay a slight bit more getting a loan from a bank. in the end, it may all come out the same.

another issue is that sometimes buying out of state also triggers higher rates......

movie zombie

 

[Hera]

Date: 11/5/2008 8:53:15 PM
Author: diane5006
As for the broker v bank...I don''t think you can get a better rate from a bank...unless you have a really good relationship...read $$$$$$ with them...

Chase advertises better rates...but I am suspicious...

You should contact 2-3 lenders and see...I may be wrong about this...but looking at too many tweaks you credit score...too many inquies

I believe I heard that mortgage inquiries within a two week period count as one inquiry, but definitely check to make sure

 

[Hera]

Date: 11/5/2008 8:29:30 PM
Author: April20
I dont know that i have anything truly new to add, but I locked in my rate for the home we are purchasing at 6% today. We were quoted 6.5% about five days ago and 5.875% about ten days ago. It's been quite volitale the last few weeks. My mortgage broker felt that the rates would hold for tomorrow and may or may not drop that additional 1/8%. He indicated that the trend has been to drop to that just below 6% rate and then spike back up near 7.

I locked in on a non jumbo residential rate for today also at 6%

 

[Tacori E-ring]

Didn''t read all the replies but DH uses a mortgage broker. They shop around for you. Plus investment loans are ALWAYS higher than a home you are living in.