Okay, gang, here’s the scoop. I’ve got excellent credit (a score of 702 to 792), depending on the agency). I’m looking at a $110,000 mortgage on a $140,000 house in a suburb of Orlando. My mortgage broker, one that’s connected with the real estate firm that I’m working with, keeps quoting me an interest rate of 7.5% for a 30 year fixed mortgage.
Despite seeing published rates around 7.0% to 7.25%, she insists that 7.5% is the going rate. “The other mortgage brokers will quote anything, just to get you in the door,” she claims, and that “everybody is charging 7.5%.” I don’t believe her. Maybe the mom& pop brokers are lowballing on their published rates, but what about the big banks out there? They’re all at 7.125% or so.
Fortunately, I don’t close on the house for another month, so I have time to shop around. For those involved in banking and real estate – am I getting ripped off, or are “real” mortgage interest rates really still that high?
Don’t know if this helps or not, but I was just quoted 6.5% for 30 year fixed. This is a program sponsored by the state (Kentucky) for certain types of home buyers (first home, low-income, etc.), but I’m fairly certain that all states have something similiar.
Without this state program, I was quoted a rate of 7.25 for 30 years again. So, short answer I don’t know about the competition in your area, but 7.5% does sound a bit on the high end of what else might be available.
For the record I got both of these quotes before the most recent interest rate cut.
This may or may not be helpful but I closed on my house back in the end of April before the interests rates went down. I closed at 7.5% on a 30 year fixed, and that was with a VA home loan (they usualy tack on a quarter point).
How locked into this broker are you, elmwood? (And, in an unrelated question, do you have that tatooed across your knuckles?)
I would recommend shopping your mortgage around to a few different folks and see what they say once you’re “in the door.” If the song doesn’t change, you’ll have saved some bucks, and if it does, you’ll know you’re dealing with an honest person in who you’ve got now.
I vote “ripped off” – I just signed a 30-year fixed mortgage for a 7.25% rate. I was originally quoted 7.125%, but I think my recent job changes made the banks a little queasy. Still, 7.5% strikes me as uncomfortably high.
I’ve been quoted 7.375% for a 30-yr fixed in Boston (admittedly for a much more expensive house - it’s a two-family), with similar credit scores to yours.
How many points are you looking at, elmwood? I bought a condo back in October and got a 30-year mortgage at 6.25% with a point and a half. I went through the mortgage division of NationsBank.
This is key. Posted rates are often NOT comparable because they assume different points and fees. I’ll give a plug for http://www.bankrate.com because it will give you comparables including points and charges. By the way, it’s also really localized, so you do need to be comparing rates specifically available in your area.
So far, I’m looking at zero points. I’ll pay a few, nbut I don’t want to have to pay points to get down to an interest rate that’s normal, unless the origination fees are fairly low.
I think I’m going to shop around tomorrow. Legitimate lending institutions around here – banks and credit unions – seem to be running about 7.25%. When a tenth of a percentage point makes a $10 to $15 difference in my payment, it seems worth it to have a look at other institutions.
We just bought a house in January at 7.25% on a 30-yr mortgage. We talked to a mortgage broker and a bank. Not only did we get a better rate by 0.25% at the bank, we also avoided a hefty (1 point, or in our case, $1300 up front) origination fee and a few other miscellaneous fees.