What rate should I expect?

[Dan K.]

My husband is looking to purchase a property (owner-occupied) in Dallas, TX.

He has an 800+ credit score, no credit issues. good reserves, and consistent W2 income without significant debts.   He qualified for a $500,000 loan.   

The lender said the best he could do is 7% and 1 point. That didn't seem competitive and we pushed a bit, and the lender came back with 6.625% (6.825% APR) and no points.

They're showing $10,322.06 in fees ($2,571.86 in APR and $2,795.20 in no APR costs, and $5,205.00 in prepaid costs).

Is this the best rate that he should expect?

If not, I'm definitely up for connecting with anyone who can offer a better rate! Would love advice and feedback.

[Caroline Gerardo]

@Matthew Crivelli  what is your NMLS license number ? I worked for Fair Issac. 

After the first inquiry you can pull three more in less than 29 days and have a 2-3 point hit. After 31 days each hard inquiry can reduce 4-5 points. The math allows a consumer to shop in a short window. Lenders will pull your score often again before closing. Since the score is vital to GSE pricing (loans sold to our government) a 800 gets the best rate while a 754 gets a sixteenth haircut and a 721 a quarter. 

Right now we use the middle of three. When I was at MBA in Nashville two weeks ago, the FHFA announced they are playing with a duo score model (two not three). This new model was news to Vantage scores which were announced in the past and not adopted by lenders as there is few to zero products to match. Credit scoring is being reviewed by our government, as it can be manipulated.

In this time where rate may mean a no go verses back in December when a borrower's debt to income ratio was more favorable, understanding each piece is important.

The actual "hit" depends on number of months history of paid as agreed and types of credit used.

@Dan K. Lenders are not the same. We do not have the same resources, pricing, warehouse lines, appetite for risk, or costs. Some have only chocolate chip cookies while others have a full menu. You have not found your broker partner yet. 

I advise you to find your insurance agent, contractor, CPA, broker, Realtor, and legal team that can help you to find the right choices for you.