Convetional Loan at 4.125 Is that high

[dd1204]

My husband got pre approve yesterday for a loan the rate he was quote was 4.125. We're looking to borrow about $170,000 and put 5% down. The mortage broker said it was that high because we are only putting 5% down and his credit score. When she pull the credit our American Express still show a balance even thought it was paid a couple days before. She thinks when they pull it again for the actual loan his score should be higher and they can maybe do a lower rate. My question is, is that to high should we shop around?

[Deleted]

That doesn't seem crazy to me. It's my understanding that rates are up a little right now, and I've also heard from my mortgage broker that loans under $200,000 don't qualify for the best rates. Nor do loans with less than 20 or 25% loan to value (equity). That's aside from the credit score issue.

Definitely shop around, but right around 4 might be where you land. And that's still a historically amazing rate!

[wanderlustfoodie]

That seems high to me. We are contemplating moving and the loan rates we've received from two different banks for a super jumbo are both below 3.5% so that seems very high to me for a conventional - but I'm not a mortgage expert.

But like tosa said, 4.125% is still a great rate historically.

[regina22]

Feb 1, 2013 12:24:37 GMT -5 dd1204 said:

My husband got pre approve yesterday for a loan the rate he was quote was 4.125. We're looking to borrow about $170,000 and put 5% down. The mortage broker said it was that high because we are only putting 5% down and his credit score. When she pull the credit our American Express still show a balance even thought it was paid a couple days before. She thinks when they pull it again for the actual loan his score should be higher and they can maybe do a lower rate. My question is, is that to high should we shop around?

Did they share what your husband's credit score was? Below 700? With 5% down and less than a 740 score, that would probably be in line, but it never hurts to shop around.

[dd1204]

Feb 1, 2013 12:26:47 GMT -5 @totsintosa said:

That doesn't seem crazy to me. It's my understanding that rates are up a little right now, and I've also heard from my mortgage broker that loans under $200,000 don't qualify for the best rates. Nor do loans with less than 20 or 25% loan to value (equity). That's aside from the credit score issue.

Definitely shop around, but right around 4 might be where you land. And that's still a historically amazing rate!

Thanks, we'll try to find a mortgage broker so they can do the shopping for us. Seems a little silly that the higher your loan amount the lower the interest. Maybe we'll just go with FHA which we didn't want because of the high PMI.

[dd1204]

Feb 1, 2013 12:48:25 GMT -5 regina22 said:

Feb 1, 2013 12:24:37 GMT -5 dd1204 said:

My husband got pre approve yesterday for a loan the rate he was quote was 4.125. We're looking to borrow about $170,000 and put 5% down. The mortage broker said it was that high because we are only putting 5% down and his credit score. When she pull the credit our American Express still show a balance even thought it was paid a couple days before. She thinks when they pull it again for the actual loan his score should be higher and they can maybe do a lower rate. My question is, is that to high should we shop around?

Did they share what your husband's credit score was? Below 700? With 5% down and less than a 740 score, that would probably be in line, but it never hurts to shop around.

His score was 725 yesterday when she pull it. Put she thinks it would go up because is showing a balance on our Amex that was paid off on Monday. We thought that by paying it before she ran the report it would not show but she saids it takes 30 days to update.

[dd1204]

Feb 1, 2013 12:48:25 GMT -5 regina22 said:

Feb 1, 2013 12:24:37 GMT -5 dd1204 said:

My husband got pre approve yesterday for a loan the rate he was quote was 4.125. We're looking to borrow about $170,000 and put 5% down. The mortage broker said it was that high because we are only putting 5% down and his credit score. When she pull the credit our American Express still show a balance even thought it was paid a couple days before. She thinks when they pull it again for the actual loan his score should be higher and they can maybe do a lower rate. My question is, is that to high should we shop around?

Did they share what your husband's credit score was? Below 700? With 5% down and less than a 740 score, that would probably be in line, but it never hurts to shop around.

His score was 725 yesterday when she pull it. Put she thinks it would go up because is showing a balance on our Amex that was paid off on Monday. We thought that by paying it before she ran the report it would not show but she saids it takes 30 days to update.

[uscuba2]

I just got preapproved for 180-200 for 3.60 but my score is 775


credit card companies report when the billing cycle closes. So if your billing cycle closes on the 20th of every month, you want to pay a couple days before the 20th. his score will not jump a lot (if at all) after one month of having a zero balance. If it was that easy everone would do it. you might get the loan interest to decrease by a tenth or so but it will be be unlikely to decrease to 3.5 or 3.75. this should have been done a couple months ago. If you have a much better score make him a authorized user only and that can help boost the score.

[cjeanette]

I would shop around.

[dd1204]

Feb 1, 2013 14:01:31 GMT -5 uscuba2 said:

I just got preapproved for 180-200 for 3.60 but my score is 775


credit card companies report when the billing cycle closes. So if your billing cycle closes on the 20th of every month, you want to pay a couple days before the 20th. his score will not jump a lot (if at all) after one month of having a zero balance. If it was that easy everone would do it. you might get the loan interest to decrease by a tenth or so but it will be be unlikely to decrease to 3.5 or 3.75. this should have been done a couple months ago. If you have a much better score make him a authorized user only and that can help boost the score.

Thanks, we don't carry a balance, we just use the Amex for all of our purchase to get the points and paid it off every month. We really thought the interest rate would be below 4

[bluelikejazz]

We just got approved for 3.625% Re-Fi with ~28% Equity, and our credit scores are awesome. Seems like you're in the right range.

[dd1204]

Would it be better to wait a month or 2 and see if his score goes up by not charging anything on the credit cards?

[wanderlustfoodie]

Feb 1, 2013 16:36:45 GMT -5 dd1204 said:

Would it be better to wait a month or 2 and see if his score goes up by not charging anything on the credit cards?

I don't think that doing this would make his credit go up enough- or at all - to make a difference for loan purposes.  Each point your credit score rises doesn't result in a corresponding decrease in the interest rate. It happens in broader strokes.  For instance, 750 is the rough minimum for the best loan terms and so if you raise the credit score, say, 5 or even 10 points you still won't end up seeing a difference in your interest rate if your husband has a 725 score.

Have you reviewed the actual report to make sure everything is accurate?

[LoveTrains]

Feb 1, 2013 16:36:45 GMT -5 dd1204 said:

Would it be better to wait a month or 2 and see if his score goes up by not charging anything on the credit cards?

Probably not, because in a month or two you will have what is known as a "hard pull" on your report from applying for credit. (for when this woman just ran your scores). 

[mrsfarmer]

It really depends where you applying with credit scores and rates. And LoveTrains is right - she lowered your score with the hard pull, if she pulls it again, it will lower it more.

[ghost]

I think it is more the 5% down that is causing the rate to go up..Could you put 20% down? That would lower it for sure

[dd1204]

Feb 1, 2013 18:51:58 GMT -5 mrsfarmer said:

It really depends where you applying with credit scores and rates. And LoveTrains is right - she lowered your score with the hard pull, if she pulls it again, it will lower it more.

So when we apply for the actual loan is going to be pull again and make his score lower?

[karinothing]

When we looked at loans where we would only be putting 5-10% down that were NOT FHA loans the interest rate was similar. Our broker told us that we could get a lower rate with 20% down. Our credit scores are around 800.

I think FHA is offering 3.5% or something if you are interested in that.

[dd1204]

Feb 2, 2013 8:01:02 GMT -5 karinothing said:

When we looked at loans where we would only be putting 5-10% down that were NOT FHA loans the interest rate was similar. Our broker told us that we could get a lower rate with 20% down. Our credit scores are around 800.

I think FHA is offering 3.5% or something if you are interested in that.

We didn't want to go with FHA because our payment would be higher because of their high PMI. I also have student loans and the broker said that they would have to be in deferment for 13 months from the date of closing to qualify.