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FHA rates - can I negotiate to get better rates

The last post in this topic was posted 5214 days ago. 

 

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I'm applying for a mortgage and the rate the loan person quoted me for an FHA 30 yr/fixed is 7%. On the FHA website it says the interest rate ranges are (as of today June 7) is 6.125% - 6.366% and for Houston, Texas the average fixed rate (as of today) is 6.5%. Do you think it would be ok to ask the lender if I could get down to at least 6.5%? Can lenders do this?

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7% would be the zero point rate for an FHA loan today. ANYTHING lower then that and you will be paying points. Guessing from the rates I would say there are two points in there. So you would see a fee of 2% the loan amount as a FEE at closing. Can be very nasty. Low rates should be a warning that somewhere in there points are hiding. They dont even have to tell you about it as long as you agree to the total closing costs.

 

-David

FHA LO

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You can ask them that you want to buy down to 6.5% - there would be I am guess a 1 point fee.

-Dave

 

 

The seller (its the builders) is paying all fees and appraisals. Would that include the points?

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You can ask them that you want to buy down to 6.5% - there would be I am guess a 1 point fee.

-Dave

 

 

The seller (its the builders) is paying all fees and appraisals. Would that include the points?

doubt it.

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7% would be the zero point rate for an FHA loan today. ANYTHING lower then that and you will be paying points. Guessing from the rates I would say there are two points in there. So you would see a fee of 2% the loan amount as a FEE at closing. Can be very nasty. Low rates should be a warning that somewhere in there points are hiding. They dont even have to tell you about it as long as you agree to the total closing costs.

 

-David

FHA LO

 

 

 

on a TEXAS rate sheet.

 

6.5% pays the broker 1.5% and up (depending on lender)

 

there would be NO FEES and buy downs for that rate. expect 1% origination fee.

 

unless you are doing down pmt assistance OR this is a really messy manual underwritten loan..... you should be able to get that. 'maybe' less.

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I'm sure your builder is paying a set amount (it may be a dollar amount or a percentage of the sales price) as opposed to paying ALL fees and the appraisal. I'm sure they will pay points on your behalf if there is enough room to do it, but there probably won't be after they pay all the other fees.

 

I noticed you went from the quoted rate of 7.000% to a desired rate of 6.500%. Is there some reason why you didn't list anything in between? I'm guessing that your loan officer told you that FHA loans move in 0.500 increments. This is true for one type of FHA pricing, but their are two different types (Ginnie Mae 1 and Ginnie Mae 2). Ginnie Mae 1 moves in 0.500 increments but Ginnie Mae 2 moves in 0.125 increments (this may be slightly different dependant upon your lender). Try to split the difference and get a rate of 6.75%. If you are paying an origination fee you should be able to get this rate without any additional points.

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I'm sure your builder is paying a set amount (it may be a dollar amount or a percentage of the sales price) as opposed to paying ALL fees and the appraisal. I'm sure they will pay points on your behalf if there is enough room to do it, but there probably won't be after they pay all the other fees.

 

I noticed you went from the quoted rate of 7.000% to a desired rate of 6.500%. Is there some reason why you didn't list anything in between? I'm guessing that your loan officer told you that FHA loans move in 0.500 increments. This is true for one type of FHA pricing, but their are two different types (Ginnie Mae 1 and Ginnie Mae 2). Ginnie Mae 1 moves in 0.500 increments but Ginnie Mae 2 moves in 0.125 increments (this may be slightly different dependant upon your lender). Try to split the difference and get a rate of 6.75%. If you are paying an origination fee you should be able to get this rate without any additional points.

 

 

Thanks I'll try that and thanks DallasLoanGuy for the info & clarification. I went from 7.00% to 6.5% because I didn't know to list anything in between (total newbie here). But that's a good suggestion too. Any little bit helps in my mind. The list price is $132,550 and I've already paid $2K for the earnest money. I know that I need to come up with an additional $1900 +/- at closing. But I'm trying to get the best interest rate possible. My monthly payments is estimated on the loan app. as $1265.90 (P&I 868.56; hazard ins. 96.47; real estate taxes $247.52; mortgage ins. 53.35). Also to be added will be the $12.90 for the HOA ($150/year). But I know there is a mud tax and school tax, right? How much should I add for that?

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ALL taxes are collected by the county at once. city, muni, school, everything.

 

 

So when its says real estate taxes, all the taxes are included? I won't get any surprise tax due notices separate from my monthly payments? That would be nice! I don't like surpises like that.

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ALL taxes are collected by the county at once. city, muni, school, everything.

 

 

So when its says real estate taxes, all the taxes are included? I won't get any surprise tax due notices separate from my monthly payments? That would be nice! I don't like surpises like that.

 

no surprises

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7% would be the zero point rate for an FHA loan today. ANYTHING lower then that and you will be paying points. Guessing from the rates I would say there are two points in there. So you would see a fee of 2% the loan amount as a FEE at closing. Can be very nasty. Low rates should be a warning that somewhere in there points are hiding. They dont even have to tell you about it as long as you agree to the total closing costs.

 

-David

FHA LO

 

 

Where on earth are you getting that information? Based on what lender???

 

6.500% is very doable assuming you got an automated underwriting approval. I would not look for 6.750%. Go with your gut and request what you were thinking. You were not offbase...

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