Are we getting screwed on our mortgage?

[sillygoosegirl]

It seems like as soon as we got the signed contract back from the seller (Thursday evening), and now that our timeframe probably means we can't change lenders, our mortgage broker's rates have gotten worse without regard to the market. I'd give a longer explanation, but I'm on my phone on vacation (been waiting on this damn short sale since April).

Broker quoted us:
Thursday: 3.25 with 1 point
Friday: 3.25 with 1.5 points or 3.375 with 0.875 points
Today: 3.375 with 1.125 points

I realize there are market forces at work (and I realize they are all good rates in absolute terms), but they don't seem to explain the changes in what we're seeing. From:

www.mortgagenewsdaily.com/mortgage_rates/daily.aspx

Thursday: 3.35
Friday: 3.38
Today: 3.37

Are we getting screwed? Is there anythig to do about it if we are? And is it too late to change lenders? We are supposed to close on the 27th. It's a short sale and the owners are being forgiven over $110K in debt on the house, so they really need to close this year (otherwise they will owe income tax on it, which I'm sure they couldn't afford to pay).

[noodleoo]

I don't know much about mortgages, but yes, that seems like a bad deal in this market. We locked in 3.375% on a 30 year fixed about a month ago, with no points and no closing costs (they are paid by the bank). Granted, this is a refi, but I'm pretty sure you should be able to get those rates without the points. Wells Fargo is quoting 3.375% today. Do the points have something to do with it being a short sale?

Are you locked into that lender because it is a short sale? Do you have a down payment on it? If you have to close this year, you could stay with this bank for now and then refi next year if you have 20% equity. Just make sure there is no prepayment penalty.

[vanillacourage]

I would C&P the alternate rates to your loan officer and ask for background on why their rates are higher. If you don't get a satisfactory answer, you could then look at getting out & going with a new lender. The thing you'd have to watch for is whether all documents (including inspection & appraisal) could seamlessly transfer to a new lender.

[hbomdiggity]

Why can't you change lenders? Is it just a time thing? We didn't have to commit to a lender until shortly before close.

No advice on the actual rates - our were slightly higher but we didn't pay points and had a larger mortgage (but excellent credit).

[sillygoosegirl]

The points don't have to do with it being a short sale an we aren't locked into a particular lender by anything except the time frame (our credit union said they needed a signed contract to get started, an then 30 day to close after that, which we don't have). We'd planned to pay about a point as the seller/bank has agreed to put $5000 toward our closing costs, which should end up covering somewhere between half and a full point. Plus we plan to be in the house 20+ years. We're putting 25% down (which drops a flat 0.25 of a point regardless, but I'm quoting the 20% down rates above), so hopefully we will have 20% equity for at least a few days... But I worry that the cost of a refinance early would be too high to bother with.

These are standard 30 year fixed mortgages with no prepayment penalty.

[noodleoo]

Oh nevermind, refi-ing isn't going to help you if you are paying points. That money is paid up front. (duh, my bad). I definitely do not think you should be paying points to get those rates, unless you have less than ideal credit scores. I would definitely shop around and find out why your credit unions rates are higher. Or, I would go with a higher rate with no points and then refi after you close down to a lower rate.

ETA: is this a house or a condo? Rates are usually higher on condos vs. single family homes. Perhaps that is the difference? also, make sure that paying the point is going to be worth it in the long run if you do end up paying it.

[LoveTrains]

I am not understanding why they are giving you points with those rates.

Granted, I closed a month ago, but I closed on 11/7 with 3.5% and no points. My understanding is that the rates right now should be 3.25% or 3.375% with NO points.

[LoveTrains]

Also, congrats on your short sale FINALLY going through!

Mine was the same way, once we got the signed approval from the seller's bank we had to close super quickly. We closed in 21 days, and i was only able to close that quickly as we had them do the appraisal for my financing before getting final approval. (which is really a no-no).

[catbus]

Yeah, we locked our refi rate 11/27 at 3.25% (no points), so those sound high.

[sillygoosegirl]

Less than ideal credit, but still above 750, which I thought should qualify us for the best rates.

[whitemerlot]

We just locked in at 3.25 for a 30 year new loan with no points and 20% down.

[LoveTrains]

My mortgage broker told me that anything above 750 did qualify for the best rates. So yeah, my biggest confusion is why you are being told you have to pay points with those rates.

[sillygoosegirl]

So DH read her the riot act earlier this afternoon, and suddenly she "found" us a slightly better deal. I still think we are getting somewhat screwed but maybe less.

But I'm still struggling to make sense of this new GFE (the only one we've gotten since April). Is it normal for the escrow prepaids to be a full year of property taxes and insurance? That seems slightly ridiculous to me. Especially because property taxes are due in November around here.

Boy is this ever how I didn't want to spend my Hawaii vacation...