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mortgage interest rate
We have been working with a mortgage broker, who was recommended to us by my best friend. We're pretty far down the path toward closing on our first home (hoping to close on June 29). Today the broker finally gave us our interest rate: 4.75% (4.125% + .625% for lender paid PMI). As we are doing 10% downpayment, the lender paid PMI works out to be a lesser monthly payment, plus we'll still get the tax deduction (the regular PMI deduction is set to expire soon). Also, the closing costs are going to be around $10K.
DH is freaking out a little bit about the interest rate and the higher than anticipated closing costs. He thinks that we should be able to do better. Anyway, DH contacted HR at his company this afternoon, and found out that his company has a list of contacts at "recommended" banks, who may or may not give better rates to employees of the company. DH is considering calling those banks tomorrow to see if they can offer a better interest rate.
Do you think it is worth shopping around? Do you think this will cause a big delay in the closing process? We are total newbies at this.
Thanks!
Diagnosed with "unexplained infertility" 1/11
IUIs #1
Re: mortgage interest rate
I think thats pretty normal for 10% down (its what we were offered and would decrease quite a bit if we do 20% plus no pmi). And 10g is cheap for closing, at least around here.
We got 4.0% with 3.5% down.
We were offered 3.875%, but we had to buy points, and we just weren't into that.
I'd definitely shop around if I were you. The worst thing that could happen is that they give you the same figure as your current broker.
That rate quote made me choke on my coffee a bit. I'd shop around regardless of the quote. How can you know that you are getting the best deal without shopping around? We got our 2 favorite lenders into a bidding war on our loan and ended up at 3.5% with 0.75 points. On the day that we locked, the 3.5% rate was going at 2 points, so we ended up saving ourselves $4500ish at closing by getting the points down and $25k over the lifetime of the loan in lower interest payments. Although we are putting a larger % as a down payment than you are, I still think a little bidding war could help you.
Edit: It's okay to ask "Is that the best that you can do?" Simply asking that question sends the message that you are not 100% thrilled with the offer, and may get them to sweeten it up for you.
Diagnosed with "unexplained infertility" 1/11
IUIs #1
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