Should 780 score get you best interest rate?

Question

I have a 780 credit score and just got a quote on a refinance of a $400K loan at 67% LTV. Primary residence. The interest rate was 4.25%. Is that a good rate for my credit score? Also being charged $1750 for title fee and $1500 for lender fees.

I'm getting a couple more quotes, but just wanted to check in with the people who do this more than I do.

Also if there are any recommendations for lenders or really good programs right now, I'm all ears.

Thanks!

Shaun Weekes · Answer

Anything 740 plus will put you in the best credit bracket.  Depending on how much you put down will also make a difference in your rate.

How much are you puthing down?

Stephanie Medellin · Answer

@Curtis H.  Always remember, interest rates can change until you lock, so even if you were quoted that yesterday, that rate is already gone.  Some days pricing stays about the same, sometimes it jumps, sometimes you get lucky.

Based on rates today, it's a little high if you're paying costs out of pocket and not from a lender credit.

Are you taking any cash out or is this a straight refinance to lower your rate?  Rates are slightly different depending on whether you take cash out or not.

As mentioned above, anything over 740 FICO will get you the best rates on conventional.

Curtis H. · Answer

Account Closed

They don't know my employment status yet, so I don't think that's it. My W2 income is plenty high enough and has gone up from 2015 to 2016. Not to mention they know about my income from rentals. I agree, it sounds "reasonable" but it isn't necessarily a good deal. Just average. I feel like with my numbers I can get 4.25% anywhere.

@Chris Mason

I know you're out there somewhere.

Account Closed · Answer

780 will get the top rate. Of course other factors might be in place like your debt to income and your employment status.  Interest is on the way up but that sounds reasonable.

Curtis H. · Answer

Call went very well and the answers to all the above questions was what I want to hear. I explained to them I will not give lender info until I decide to go with them. Not because I didn't trust them, but I know in a rush to close loans people don't always read the notes. New lender calling the current lender before we are locked in can be very bad in a Sub2 situation.

The only thing I don't like about the situation I am now in, which is not a terrible thing, is to lock in the rate before it goes up (and it will) I will have to move fast. Move fast means quick appraisal. Quick appraisal means no time to make cosmetic repairs to get better appraisal. Lower appraisal means less money available for the HELOC, which is a MAJOR tool in my investing for the next two years. Getting access to $100K instead of $200K can really alter things. All in all, good problem to have considering I was in a damn apartment in an area I HATED 2 and a half years ago!

Curtis H. · Answer

@Brian Person

Thanks for the feedback.

I think all I need to know now is should I tell them about the Sub2. They are going to ask if I rent the home now, and I feel like it's not illegal to do Sub2 so why not tell them the truth. If they seem wishy washy about it, move on to another.

The questions I will probably ask them are...

1) When can I lock the rate and how much is it to do so?

2) Prepayment penalty?

3) Since LTV is lower than 80% can I pay taxes and insurance myself and terminate escrow account? (not that I would, but I always want the option to do so)

4) How quickly will you sell the mortgage? Do you sell to a handful of companies or to the highest bidder typically?

5) Any programs out there that I can take advantage of?

6) Lastly, don't call the current lender under any circumstances until I give permission and we are locked in. I have payoff info good for 30 days out and can get an updated one when needed. (I don't need them alerting the lender and then we don't close, and now they call the loan due. I am kind of worried about this)

Whatcha think?

Brian Person · Answer

@Curtis H.

If this is for your primary home, this is a pretty competitive rate. You have to remember, rates have increased quite a bit the past few months. As the stock market has gotten better in the past three months, the 10yr treasury yield has increased as well. Today it is 2.47 while in November is was closer to 1.75 and even lower last summer.

Also, as far as fees go, on a $400k loan, $1500 in lender fees is pretty reasonable. I cannot speak to the title fees as those change from state to state and county to county. I do remember California being a bit more expensive when I used to write mortgages there.

Another note is that rates on refinances will be slightly higher than on purchases.

Curtis H. · Answer

@Stephanie Irto @Mindy Jensen @Chris Mason

So found out their rates are competitive, and 4.25% seems to be the best right now. I am talking with them tomorrow morning and I just was going to be honest with them about me buying the home Sub2 and paying the mortgage. I figure they are going to do a title search anyway and see I am on title. I just want to make sure I'm not being naive and being a little too honest. Income and LTV wise I don't see an issue at all.

Curtis H. · Answer

@Sam Alomari

This is to refinance a home I am living in Sub2 right now.

Sam Alomari · Answer

Just curios, what is your current rate? are you sure the spread worth the process and the closing cost? If you just want to pull money to invest, then you can get heloc for a much better rate, and you won't pay closing fee.

Should 780 score get you best interest rate?

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