FICO Score Vs. Interest Rate.
OK, with a 660 Fico, the broker is telling me that the best rate I can qualify for on a second mortgage (20%) of a 155K loan is 9.95%. [The first mortgage (80%) is at 4.375 on a 3/1 ARM.] I find this 9395% rate ridiculous when we are supposed to be at 40 Year lows on interest rates.
Is this just fanciful thinking on my part? Is there an actul justification for such high rates by these lenders? I never realized that 660 was consisered to be such a poor score by lenders.
Anyways, by the end of this year, I hope to be back up in the 680-720 range. Now I just need to figure out how to get this done. LOL.
JS.
I think you need to find another Broker! Credit cards are cheaper then that!
Cheers
Marty
Sounds a bit high. I have a lady with a 617 and she is getting a 7.8. An ARM If rates are at there lowest in 40 years ask your broker what good an ARM would do?
Just a thought
Sire
That rate is radioactive ! Lenders and brokers can shift your numbers all over the place, to get themselves paid more up-front, on the back or in the middle, or a lot of one and less of the other two, etc.
Everyone should choose a lender or broker who will do the best they can with investors, realizing that volume creates more than just that one investor's business, since any client who gets good deals will become a free advertising billboard for that lender/broker. Whoever your broker is does not get this picture clearly, at his time. Some face to face reality check converstion is in order, or, like a prior post indicated, just move on, since this broker is clearly trying to get to you, and therefor is unlikely to be trustworthy, in the future.
Yes if you are plannin on living in this home longer than 5-7 years, don't do the ARM. If rates are at 10% when you have to refinance, was it worth it?
He's trying to get a 2nd mortgage, not a first. 2nd are high due to their position. If you are looking for lower rate, refinance your 1st and cash out or try get a HELOC. Otherwise, sounds right for a 2nd mortgage.
660 is not that great. It is so-so at best.
The score is not the only thing that is considered. I had a guy that had a 720 with only one trade line of high credit of 1000.00 dollars on his beareau. Go figure, he needed a co-borrower to qualify. Another had a 640 with EVERYTHING current and most paid off. BOOM done deal.
I dont agree/understand the funny math that is used to come up with these so called scores. Day to Day they change and in every bureau they are different. Ultimately an underwriter meaning a person makes the descision.
[addsig]
Just out of curiosity did your broker call you back and stay in contact or do you call him.
ED
The main reason Im asking is that the brokers Ive tried dont seem to want to do the extra work to work with investors.
I figure with rates as low as they are they are all triing for the easy buck working with the average homeowner triing to refinance thier primary residence. Has anyone else noticed this or is it just me?
Sorry to horn in with my own question but this seemed to fit the acation.
ED
Quote:
On 2004-02-06 19:40, smithj2 wrote:
OK, with a 660 Fico, the broker is telling me that the best rate I can qualify for on a second mortgage (20%) of a 155K loan is 9.95%.
Well You have only given us a FICO and the fact that this is a second. So no one can tell you if this is a good rate or not. It may be bad or it may be very good.
Is this a OO or NOO?
What is your DTI?
Full Doc?
What will the new LTV be?
How many mortgages do you have?
All of those things affect the rate.
For a second it's not a bad rate, they are typically higher than prime. Keep your second at a short term to get it paid off quicker. Home Equity Line may be a good option if you are good at repaying, if your not, it will probably eventually be refinanced since it is basically a revolving credit line on your home.
There are many lenders advertised in the "Lenders" section on this website.
Go there and contact some lenders.
The words "high" and "low" are comparisons. But only useful when comparing apples to apples.
Why compare a 9.95% rate on a 2nd mortgage that will make LTV near 90% or more - to a 4% 1st mortgage at 70% LTV. The risks are NOT the same.
Ask a few mortgage lenders what they will offer.
Then you will know what "High" is.
gl
N.
Sorry it took so long to reply. ELOCK, you are right in your assumption. The broker was not very responsive and I was the one doing most of the calling.
To answer some of the other questions, the CLTV will be 100%.
I am worried about going to another broker because I have had numerous inquiries on my credit report (searching for a good deal) without realizing the hit it would take on my FICO. Now that I am aware, I am wary of having another broker pull my report 'cos I'm afraid my FICO will go even lower.
I may be able to do a home equity LOC after closing, but I am worried that my debt-to-income ratio will be skewed. There is available equity in the property (Over 20K), but I have other mortgages and I am worried that the bank doing the HELOC will not like how things look on paper.
Thanks,
JS.
Mortgage rates are not based on FICO SCORES. You credit history, credit depth, amount of reserves, income, and reason for the money are all put into the computer and out pops your risk grade. GUESS WHAT that determines your rate.
660 Is fine, relax
Lori
[addsig]